Assume That Michael Is Interested in Buying a Lawn Mower

question 10

Multiple Choice

Assume that Michael is interested in buying a lawn mower. Right now, interest rates are very high, but he believes they will soon start to fall. If Michael purchases the lawn mower today, we know that

• A) he was concerned about future inflation.
• B) the current inflation rate was low.
• C) he paid an inflationary premium.
• D) he had a strong, positive rate of time preference.

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