A．people with declining income tend to buy lessB．people……
TEXT D
A scientist who does
research in economic psychology and who wants to predict the way in which
consumers will spend their money must study consumer behavior. He must obtain
data both on the resources of consumers and on the motives that tend to
encourage or discourage money spending.
If an economist were
asked which of three groups borrow must people with rising incomes, stable
incomes, or declining incomes—he would probably answer: those with declining
incomes. Actually, in the years 1947 -1950, the answer was: people with rising
incomes. People with declining incomes were next and people with stable incomes
borrowed the least. This shows us that traditional assumptions about earning and
spending arc not always reliable. Another traditional assumption is that if
people who have money expect prices to go up, they will hasten to buy. If they
expect prices to go down, they will postpone buying. But research surveys have
shown that this is not always true. The expectations of price increases may not
stimulate buying. One typical attitude was expressed by the wife of a mechanic
in an interview at a time of rising prices. "In a few months," she said, "we’ll
have to pay more for meat and milk; we’ll have less to spend on other things."
Her family had been planning to buy a new car but they postponed this purchase.
Furthermore, the rise in prices that has already taken place may be resented and
buyer’s resistance may be evoked. This is shown by the following typical
comment:" I just don’t pay these prices; they are too high."
Traditional assumptions should be investigated carefully, and factors of
time and place should be considered. The investigations mentioned above were
carried out in America. Investigations conducted at the same time in Great
Britain, however, yielded results that were more in agreement with traditional
assumptions about saving and spending patterns. The condition most conducive to
spending appears to be price stability. If prices have been stable and people
have become accustomed to consider them "right" and expect them to remain
stable, they are likely to buy. Thus, it appears that the common business policy
of maintaining stable prices with occasional sales or discounts is based on a
correct understanding of consumer psychology.
The example of the mechanic’s wife is intended to show that in times of rising prices______.
A．people with declining income tend to buy less
B．people with stable income tend to borrow less
C．people with increasing income tend to buy more
D．people with money ’also tend to buy less
