Standard economic models assume that people make decisions based on _____, not _____.
A) altruistic motives; self-interest
B) real variables (i.e., variables adjusted for inflation); nominal variables
C) endowment effects; framing
D) framing; anchoring

Question

Quizplus · Accepted Answer

Standard economic models often assume that people make decisions based on real variables, which are adjusted for inflation, rather than nominal variables, which are not adjusted for inflation. This distinction is crucial for understanding economic behavior and decision-making in a way that accurately reflects the purchasing power of money over time.

Standard Economic Models Assume That People Make Decisions Based on _____