In Behavioral Economics,the Endowment Effect Refers to

question 34

Multiple Choice

In behavioral economics,the endowment effect refers to

• A) most people believe that most wealthy people inherit their wealth.
• B) many people would be indifferent between being endowed with money or knowledge.
• C) many people place a higher value on what they own than when they consider purchasing.
• D) most people respond to tax incentives to provide an endowment for their children.

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Definitions:

Gains

The increase in value of an asset or investment, measured as the difference between the sale price and the purchase price.

April Futures Price

The April Futures Price refers to the agreed-upon price set in a futures contract for the delivery of a specific commodity, financial instrument, or currency in April.

S&P 500 Index

An index of the American stock market reflecting the value of 500 large-cap companies with shares available on either the NYSE or NASDAQ.

Open Interest

The total number of outstanding derivative contracts, such as options or futures, that have not been settled.