Suppose That You Have $100 Today and Expect to Receive

question 36

Multiple Choice

Suppose that you have $100 today and expect to receive $100 one year from today. Your money market account pays an annual interest rate of 25%, and you may borrow money at that interest rate. Consider the budget constraint between "spending today" on the horizontal axis and "spending a year from today" on the vertical axis. What is the slope of this budget constraint?

• A)−0.75
• B)−1.00
• C)−1.25
• D)−2.25

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Definitions:

Fixation

In psychology, an obsessive focus or attachment to someone or something, potentially leading to maladaptive patterns of behavior.

Oral Stage

The first stage in Freud's theory of psychosexual development, occurring from birth to about 18 months, where the infant's pleasure centers are the mouth.

Overeating

The consumption of an excess amount of food beyond what is necessary for energy and nutrition.

Psychosexual Stages

Psychosexual stages are a core concept in Freudian psychology that outlines five stages of sexual development from infancy to adulthood, each characterized by the erogenous zone that is the source of a child's psychosexual energy.