Suppose Two People with the Same Level of Income and Wealth

question 10

Multiple Choice

Suppose two people with the same level of income and wealth have different discount rates.Joe has a very high discount rate and Jim has a very low discount rate.Which one of the following is TRUE?

• A) Joe is more likely to borrow than Jim.
• B) Joe is less likely to borrow than Jim.
• C) Joe and Jim will borrow the same amount.
• D) Neither Joe nor Jim would be borrowers.

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Definitions:

Resistance Point

The least favorable outcome a negotiator is willing to accept before walking away from a negotiation.

Information Overload Tactic

A negotiation or influence strategy involving overwhelming an opponent with excessive information to cloud their decision-making.

Costs of Delay

The negative consequences or losses associated with not resolving a problem or completing a task in a timely manner.

Distributive Bargaining Strategies

Negotiation techniques focused on dividing a fixed amount of resources, often resulting in a win-lose situation.