Which of the Following Would You Prefer

question 4

Multiple Choice

Which of the following would you prefer?

• A)$500 to be received in 10 years when rates are 8 percent
• B)$300 today
• C)$600 to be received in 12 years when rates are 8 percent
• D)$700 to be received in 12 years when rates are 7 percent

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Definitions:

Big Business

Large-scale or major corporations and enterprises that have significant influence on the economy, often with considerable power and resources.

Debt

A sum of money that is owed or due.

Thrift

The practice of saving money and spending it wisely, often associated with frugal living.

Reconstruction Finance Corporation

Federal program established in 1932 under President Herbert Hoover to loan money to banks and other institutions to help them avert bankruptcy.