Buddy Has $2000 in a Checking Account and Wants to Buy

question 35

Multiple Choice

Buddy has $2000 in a checking account and wants to buy a new Macbook for $1100.Buddy decides he needs the money in his account to pay his bills next month and so puts the $1100 on his credit card and pays it off gradually over the next several months.Buddy choosing to "save" his cash on hand for everyday expenses is:

• A)irrational,since money is fungible.
• B)rational,since Buddy can now pay all his bills with a small credit card payment each month.
• C)going to make Buddy wealthier in the long run.
• D)rational,since he has his new computer and has money in the bank.

---

Definitions:

Third Party

An individual or group other than the two primarily involved in a transaction or legal situation.

Contractual Duties

Obligations imposed by a contract, requiring parties to act (or refrain from acting) in certain ways in fulfillment of the agreement's terms.

Executory Contract

A contract where both parties have outstanding obligations that have not yet been performed.

Bankruptcy Court

A specialized federal court where cases regarding bankruptcy filings and related legal matters are heard.