If you save more because Social Security motivates you to provide a greater level of inheritance for your children, then this is referred to by economists as the
A. slovenly effect.
B. bequest effect.
C. asset substitution effect.
D. induced retirement effect.
Answer: B
You might also like to view...
In the above figure, suppose the economy is initially on the demand for money curve MD1. What is the effect of an increase in financial innovation such as the introduction of ATMs?
A) The demand for money curve would shift rightward to MD2. B) The demand for money curve would shift leftward to MD0. C) There would be a movement upward along the demand for money curve MD1. D) There would be a movement downward along the demand for money curve MD1.
A firm in monopolistic competition has some degree of price-setting power because
A) in the long run it earns a normal profit. B) it can never earn less than normal profit. C) the price it charges is never more than its marginal cost. D) if it raises its price, the quantity it can sell will not decrease to zero.
In general, a formula that a central bank uses to set interest rates in response to changing economic conditions is called a
A) rate-of-return equation. B) Taylor rule. C) central bank reaction function. D) market adaptation identity.
During World War II, price controls were necessitated as shortages emerged in consumer markets. This required
(a) the federal government to ration goods through tickets. (b) the federal distribution of rationing points. (c) a forced reduction in private consumption. (d) all of the above actions.