A Person with a Very High Positive Time Preference for Consumption

question 34

Multiple Choice

A person with a very high positive time preference for consumption

• A) will have a high savings rate.
• B) will have a low savings rate.
• C) prefers savings to consumption.
• D) is not as likely to borrow money as other people with lower positive time preference.

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Definitions:

Contra-revenue Account

An account that is offset against a revenue account on the income statement, typically relating to sales returns, allowances, and discounts.

Restructure Loan

The process of modifying the terms of a loan agreement, typically to provide relief to the borrower by reducing interest rates, extending payment periods, or forgiving part of the loan.

Financial Difficulties

Situations where an individual or organization struggles to manage their money effectively, often leading to debt or bankruptcy.

Foreclosure

The legal process by which a lender takes control of a property, evicts the homeowner, and sells the home after the homeowner fails to make full principal and interest payments on their mortgage.