If Michael Has a Positive Rate of Time Preference, He

question 5

Multiple Choice

If Michael has a positive rate of time preference, he will

• A) prefer to have goods now rather than two years from now.
• B) prefer to have goods two years from now rather than during the current period.
• C) prefer apples to oranges.
• D) be unwilling to pay an interest rate in order to acquire purchasing power now.

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Definitions:

NSF Check

A check that cannot be processed due to insufficient funds in the account it's drawn on, leading to a "non-sufficient funds" status.

Bank Statement

A monthly document provided by a bank detailing the account activity, including deposits, withdrawals, and current balance.

Note Receivable

A note receivable is a written promise that indicates another party's obligation to pay a specific sum of money to the holder of the note by a certain date.

Cash Equivalents

Short-term, highly liquid investments that are readily convertible to known amounts of cash and have original maturities of three months or less.