The concept of 'Consumer Sovereignty' implies that:
A. Only exporters decide production
B. Consumers ultimately determine what is produced through their demand
C. Producers decide what to produce
D. Government decides all production
Answer: Option B
Solution (By JKSSB Mock Tests)
Consumer sovereignty means that in a market economy, consumers, through their spending decisions, ultimately determine what goods and services are produced.
Explanation:
The time preference theory of interest explains the rate of interest as arising from the preference of individuals for present consumption over future consumption.
Explanation:
Capital formation refers to the net addition to the existing stock of capital goods such as machinery, buildings and equipment in an economy.
Explanation:
The life-cycle hypothesis, associated with Modigliani, posits that individuals smooth consumption over their lifetime by saving during working years and dissaving during retirement.
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