A Person Is Dynamically Consistent If

question 37

Multiple Choice

A person is dynamically consistent if

• A) His preferences over the alternatives available at some future date change as the date approaches or once it arrives
• B) His preferences over the alternatives available at some future date do not change as the date approaches or once it arrives
• C) He does not always want to follow through on his plans and intentions
• D) A and C

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Definitions:

Year-End Closing Entries

Journal entries made at the end of an accounting period to prepare the accounts for the next period by clearing out revenues and expenses to the income summary.

Owner's Drawings

The withdrawal of business assets by the owner for personal use, which reduces the equity of the owner in the business.

Gross Profit

The difference between revenue and the cost of goods sold before accounting for certain expenses.

Operating Expenses

Regular costs associated with operating a business, such as rent, utilities, and payroll.