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:

Accounts Receivable

Accounts receivable represents the money owed to a company by its customers for goods or services that have been delivered but not yet paid for, essentially an extension of credit from the company to the customer.

Accounts Payable

The amount of money owed by a company to its suppliers or creditors for goods and services purchased on credit.

Quick Ratio

A liquidity indicator that measures a company's ability to cover its short-term obligations with its most liquid assets, excluding inventories.

Accounts Receivable

Accounts Receivable refers to the money owed to a company by its customers for goods or services that have been delivered but not yet paid for.