What Is Behavioural Economics

question 20

Multiple Choice

What is behavioural economics?

• A) the study of how people make wealth-maximising decisions
• B) the study of how people behave in the face of scarcity
• C) the study of situations in which people act in ways that are not economically rational
• D) the study of how people make decisions at the margin

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Definitions:

Net Present Value

The difference between the present value of cash inflows and the present value of cash outflows over a period of time.

Investment Proposal

A document or plan proposing a financial investment, detailing the strategy, risks, and expected returns.

Salvage Value

This is the estimated resale value of an asset at the end of its useful life.

Net Present Value

Net Present Value is a financial metric that calculates the difference between the present value of cash inflows and outflows over a period of time, used to assess the profitability of an investment.