Which of the following is true of the paradox of thrift?
a) The paradox of thrift occurs when investment is not related to income.
b) The paradox of thrift occurs when households intend to save less.
c) The paradox of thrift causes consumers to save less.
d) The paradox of thrift occurs when households intend to consume more
Ans: c) The paradox of thrift causes consumers to save less.
You might also like to view...
Use the following graphs for a perfectly competitive market in the short run to answer the next question.
The graphs suggest that in the long run, assuming no changes in the given information,
A. buyers will leave the industry. B. more buyers will come to the market. C. some firms will exit from this industry. D. new firms will enter the industry.
Suppose a permanent increase in demand for the Argentinean peso causes a chronic shortage of this currency in the foreign exchange market. The Argentinean government should then:
a. request other countries to revalue their currency. b. devalue the peso. c. allow the peso to appreciate. d. restricts exports. e. restrict imports.
The income elasticity of demand is ________ if the good is ________ good
A) positive; a normal B) positive; an inferior C) negative; a normal D) less than one; an inferior E) positive; a substitute
People respond to incentives
A) by ignoring negative incentives and responding to positive incentives only. B) only when they are irrational. C) as they never intentionally make decisions that would leave them worse off. D) when they have low incomes.