How Does the Concept of Time Inconsistency Explain Procrastination

question 41

Multiple Choice

How does the concept of time inconsistency explain procrastination?

• A)People have several modes of decision making, and the less time they have to react, the worse their decisions are.
• B)An individual's ability to remember long-term benefits when making decisions diminishes the closer the action becomes.
• C)People have two selves, a "future-oriented" self and a "present-oriented" self, which have conflicting objectives when it comes to decision making.
• D)People never take long-term benefits into account when making decisions.

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Definitions:

Sticky-Wage Theory

Sticky-Wage Theory suggests that wages are slow to adjust to the equilibrium level due to contracts, worker morale, and employer incentives, contributing to unemployment during economic downturns.

Expected Price Level

The anticipated average price of goods and services in the economy for a future period, which can influence consumer and business expectations and behaviors.

Aggregate Supply Curve

The aggregate supply curve represents the total quantity of all goods and services that producers in an economy are willing and able to supply at different price levels.

Government Purchases

Expenditures by government entities on goods and services that directly fulfill governmental functions or public needs.