In Which of the Following Situations Would You Prefer to Be

question 67

Multiple Choice

In which of the following situations would you prefer to be the lender?

• A)The interest rate is 9 percent and the expected inflation rate is 7 percent.
• B)The interest rate is 4 percent and the expected inflation rate is 1 percent.
• C)The interest rate is 13 percent and the expected inflation rate is 15 percent.
• D)The interest rate is 25 percent and the expected inflation rate is 50 percent.

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Definitions:

Kin Selection Theory

A theory in evolutionary biology that predicts organisms will behave altruistically towards their relatives to increase the chances of their genetic traits being passed on to future generations.

Cooperative Hunting

The action of different individuals or species working together to hunt prey, increasing their success rate compared to solo efforts.

Altruism

Behavior of an individual that benefits another at its own cost; in biology, it is often discussed in the context of evolutionary theory and social animals.

Prisoner's Dilemma

A fundamental problem in game theory showing why two individuals might not cooperate, even if it is in both their best interests to do so.