Abigail Has a High Rate of Time Preference While Cynthia

question 86

Multiple Choice

Abigail has a high rate of time preference while Cynthia has a low rate of time preference. If the interest rate payable on savings accounts increases from 5 percent to 7 percent, then

• A)Abigail would find it easier than Cynthia to cut back on consumption and increase her savings.
• B)Cynthia would find it easier than Abigail to cut back on consumption and increase her savings.
• C)neither Abigail nor Cynthia would decrease her consumption and increase her savings because relative time preferences have little to do with the interest rate.
• D)Abigail and Cynthia would probably decrease their consumption and increase their savings by the same amount because the higher interest rate will affect them both to the same degree regardless of their time preferences.

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Definitions:

Inequality

Inequality is the state of not being equal, especially in status, rights, and opportunities, often resulting in disparities among individuals or groups in society.

Diversity

Refers to the presence of variations of different characteristics in a group of people, which can include differences in race, ethnicity, gender, age, cultural background, etc.

Teacher Attitudes

The beliefs and feelings educators hold towards their students, teaching practices, and educational policies that can significantly influence their teaching methods and student outcomes.

Rosenthal

Often associated with the Rosenthal or Pygmalion Effect, where higher expectations lead to an increase in performance.