Saying the Consumer Is Rational Means

question 69

Multiple Choice

Saying the consumer is rational means

• A) the consumer is a stand-in for all consumers.
• B) the consumer is getting rationed.
• C) the consumer makes reasonable choices.
• D) the consumer makes the best choices.

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Definitions:

Loan Term

The duration of time over which a loan agreement is in effect, and by the end of which the loan should be repaid.

Compounded Annually

Occurs when interest is added to the principal sum of an investment or loan once per year, resulting in interest on interest.

Compounded Annually

Interest calculation method where interest is added to the principal once a year, leading to an exponential increase.

Compounded Semiannually

The process of calculating interest on both the initial principal and the accumulated interest from previous periods, done twice a year.