Suppose That You Have $100 Today and Expect to Receive

question 36

Multiple Choice

Suppose that you have $100 today and expect to receive $100 one year from today. Your money market account pays an annual interest rate of 25%, and you may borrow money at that interest rate. Consider the budget constraint between "spending today" on the horizontal axis and "spending a year from today" on the vertical axis. What is the slope of this budget constraint?

• A)−0.75
• B)−1.00
• C)−1.25
• D)−2.25

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Definitions:

Sharing Power

The distribution of authority and decision-making responsibilities among individuals or groups within an organization.

Iron Law

Refers to the principle of "iron law of oligarchy," which posits that all forms of organization, regardless of how democratic they are at the start, will eventually and inevitably develop oligarchic tendencies.

Responsibility

The state or fact of having a duty to deal with something or of having control over someone.

Organizational Behavior

Organizational behavior is the study of individuals and groups in organizations.