Economists assume that households and firms share two important characteristics.One of these characteristics is that
A) they usually smooth spending during expansions but rarely do during recessions.
B) the growth rate in spending by each always decreases during recessions.
C) they only consider the future when making decisions.
D) they are forward looking.

Question

Quizplus · Accepted Answer

Economists assume that households and firms are forward-looking, meaning they consider future consequences and benefits when making decisions about spending, investment, and production. This assumption is fundamental to many economic models and theories.

Economists Assume That Households and Firms Share Two Important Characteristics