3
QuizMultiple Choice

Elasticity and Incentives — Quiz

Question 3 • Personal Finance and Economics

Which statement best describes incentives?

Answer
A
Incentives can be positive or negative.
B
Incentives are mostly negative.
C
Incentives are neither positive nor negative.
D
Incentives are mostly positive.

Explanation

An incentive is something that influences a person’s choices or behavior. It can encourage an action through a reward (a positive incentive) or discourage an action through a penalty or cost (a negative incentive). Therefore, “Incentives can be positive or negative” is the best description.

AI-written and checked against the verified answer.

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