Toby Is Hunting for a New Apartment

question 72

Multiple Choice

Toby is hunting for a new apartment.He is specifically looking for one that is located in the heart of the city and should be available for $600 per month.However,Toby is also willing to pay up to $850 per month for a place situated slightly away from the city centre.According to him,the second option "will also do." This is an example of ________.

• A)experience-based decision making
• B)rational decision making
• C)bounded rationality
• D)intuitive decision making

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Definitions:

Required Reserve Ratio

The fraction of deposits that banks are required by law to keep on hand or with the central bank, rather than lend out.

Money-Creation Process

The mechanisms through which new money is produced and introduced into the economy, primarily conducted by central banks and commercial banks.

Government Securities

Financial instruments issued by the government to finance its expenditures, including bonds, bills, and notes.

Checkable Deposits

are bank account balances that can be readily accessed and used for payments or withdrawals via checks, debit cards, or electronic transfers.