Economists Assume That Rational Behaviour Is Useful in Explaining the Choices

question 90

Multiple Choice

Economists assume that rational behaviour is useful in explaining the choices people make

• A) because irrational people do not make economic choices.
• B) even though people may not behave rationally all the time.
• C) because individuals act rationally all the time in all circumstances.
• D) even though people rarely, if ever, behave in a rational manner.

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Definitions:

Loan

Money that is loaned and needs to be paid back, including interest.

Compounded Semi-annually

Interest calculation method where interest is added to the principal amount twice a year, leading to the interest being compounded for the second term.

Goal

An intended outcome or target that an individual or organization aims to achieve.

Compounded Semi-annually

The process of adding interest to the principal sum of a loan or deposit twice a year, also accounting for the interest accumulated over the period.