What Type of Option Exists When a Decision Maker Has

question 5

Multiple Choice

What type of option exists when a decision maker has the opportunity to tailor a decision to information that will be received in the future?

• A)Real option
• B)Commitment option
• C)Project option
• D)Decision option
• E)Future option

---

Definitions:

Double Coincidence of Wants

A situation in barter economies where two parties each hold an item the other wants, making it possible for them to exchange these items directly.

100-percent-reserve Banking

A banking system in which banks are required to keep 100% of their deposits available as reserves, thus eliminating the possibility of bank runs.

Money Supply

The collective sum of money assets in an economy at a certain timeframe.

Standard of Living

The degree of prosperity, convenience, material possessions, and essential needs accessible to a specific social or economic group or particular location.