If a Consumer States That He Is Indifferent Between Receiving

question 51

Multiple Choice

If a consumer states that he is indifferent between receiving a gift certificate for $10 at the local bookstore and receiving $10 cash, we can infer that this consumer:

• A)would spend less than $10 at the bookstore.
• B)would spend at least $10 at the bookstore.
• C)would spend more than $10 at the bookstore.
• D)would spend exactly $10 at the bookstore.

---

Definitions:

Futures Contract

A standardized legal agreement to buy or sell a specific commodity or financial asset at a predetermined price at a specified time in the future.

US Treasury Repo

A form of short-term borrowing for dealers in government securities, using U.S. Treasury securities as collateral.

SONIA

The Sterling Overnight Index Average, an important interest rate benchmark in the UK that represents the average of interest rates banks pay to borrow sterling overnight from other financial institutions.

LIBOR

The London Interbank Offered Rate, a benchmark interest rate at which major global banks lend to one another in the international interbank market for short-term loans.