Economists Generally Assume That People Make

question 89

Multiple Choice

Economists generally assume that people make:

• A) predictable, repeatable decisions that cannot be modeled.
• B) predictable, repeatable decisions that can be modeled.
• C) unpredictable, repeatable decisions that can be modeled.
• D) unpredictable, repeatable decisions that cannot be modeled.
• E) predictable, unrepeatable decisions that cannot be modeled.

---

Definitions:

Compound Interest

The accumulation of money that builds over time in an investment or interest-bearing account as new interest is earned on previous interest that is not withdrawn.

Savings Account

A deposit in a commercial bank or thrift institution on which interest payments are received; generally used for saving rather than daily transactions; a component of the M2 money supply.

Interest Rate

The percentage at which interest is paid by a borrower for the use of money that they borrow from a lender.

Present Value

The current valuation of a future financial sum or sequence of cash flows, using a defined rate of return for calculation.