In Terms of Consumption Decisions, Middle Class Consumers

question 62

Multiple Choice

In terms of consumption decisions, middle class consumers

• A) prefer spending with good taste on products such as theater, books, investments in art, etc.
• B) emulate the upper Americans, are concerned with fashion and buying what experts in the media recommend.
• C) "keep up with the times" by focusing on the mechanical and recreational, and thus, ease of labor and leisure are what they continue to pursue.
• D) are prone to every form of instant gratification known to humankind when the money is available.

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Definitions:

Cash Payback Method

A financial analysis method used to determine the time needed for an investment to generate cash flows sufficient to recover the initial investment cost.

Present Value

The current value of a future amount of money or stream of cash flows given a specified rate of return.

Capital Rationing

A strategy or decision-making process that involves allocating and limiting investment funds to various projects to maximize a company's value.

Annuity

A financial product that pays out a fixed stream of payments to an individual, primarily used as an income stream for retirees.