If you overhear a group of people talking about their plans to save for their retirement and one of them says that it causes them to save more because, as they reason it, "if there wasn't Social Security I could never retire; there is, so I will and I need to save for that." You would attribute this to the
A. induced retirement effect.
B. bequest effect.
C. slovenly effect.
D. asset substitution effect.
Answer: A
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Which of the following statements about capital markets is true?
A) At one time, the U.S. capital market was larger than all other capital markets combined, but that is no longer the case. B) The U.S. capital market is currently larger than all other capital markets combined. C) The largest capital markets in the world today are in East Asia and Latin America. D) There are currently large capital markets in Europe, but none in Asia.
If a perfectly competitive firm is producing 3,000 units and, at the 3,000th unit, the difference between marginal revenue and marginal cost (MR - MC) is zero, which of the following is true?
A) The firm should exactly double production to maximize profit. B) The firm should increase production to maximize profit. C) The firm should decrease production to maximize profit. D) The firm is maximizing profit.
Assume a firm employs 10 workers and pays each $15 per hour. Further assume that the MP of the 10th worker is 5 units of output and that the price of the output is $4. According to economic theory, in the short run
A) the firm should hire additional workers. B) the firm should reduce the number of workers employed. C) the firm should continue to employ 10 workers. D) More information is required to answer this question.
A 25% decrease in the price of breakfast cereal leads to a 20% increase in the quantity of cereal demanded. As a result: a. total revenue will decrease
b. total revenue will increase. c. total revenue will remain constant. d. the elasticity of demand will increase.