Lottery Winners Who Take the Lump-Sum Payouts Instead of Payments

question 72

Multiple Choice

Lottery winners who take the lump-sum payouts instead of payments spread out over many years

• A)believe the rate of return they could find in other financial assets is less than that implied in the extended payout.
• B)sacrifice free money and are making an economically irrational decision.
• C)prefer immediate to delayed returns.
• D)are only making a rational economic decision if there is rapid inflation.

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Definitions:

Economic Infrastructure

The underlying physical and organizational structures needed for the operation of a society or economy, including transportation, communication, utilities, and services.

Buying Capacity

The ability of an individual or entity to purchase goods or services, determined by factors such as income, credit availability, and economic conditions.

Per Capita Income

The average income earned per person in a given area (city, region, country) in a specified year.

Currency Exchange Rates

The value of one currency for the purpose of conversion to another, which plays a crucial role in international trade and finance.