Rational Choices

question 14

Multiple Choice

Rational choices:

• A)are based on a comparison between total benefits and total costs.
• B)can only be made by those who are economists.
• C)are made based on expectations of the additional benefits and additional costs involved.
• D)measure benefits based on the past.
• E)are based on the experiences of the past.

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Definitions:

Holder

An individual or entity that legally possesses a document, such as a check, note, bill of exchange, or share of stock.

Certificate of Deposit

A savings certificate with a fixed maturity date, specified fixed interest rate, and can be issued in any denomination aside from minimum investment requirements.

Principal

The main party to a transaction, contract, or financial instrument, or the amount of a debt or investment before interest.

Interest

The cost of borrowing money, typically expressed as an annual percentage of the principal, or the profit earned on savings and investments.