You Will Need $12,000 at the End of Each of the Next

question 20

Multiple Choice

You will need $12,000 at the end of each of the next four years. If an interest rate of 6% is appropriate, how much must you deposit today to receive these payments?

• A) $41,581
• B) $2,880
• C) $50,880
• D) $38,021

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Definitions:

Neoclassical Economists

Economists dedicated to analyzing how goods, outputs, and distribution of income in markets are dictated by supply and demand forces.

Ultimatum Game

A game in economic experiments where one player proposes how to divide a sum of money with another player who can accept or reject the proposal.

Behavioral Economists

Behavioral Economists examine the impact of human psychology on individuals' economic decision-making processes, emphasizing deviations from traditional economic models.

Dictator Game

A game used in economic studies where a participant known as the "dictator" decides how to divide a certain amount of money between themselves and another participant.