To Say That Economics Is a Way of Thinking About

question 41

Multiple Choice

To say that economics is a way of thinking about how people make rational decisions means that people

• A) don't consider the cost of their decisions.
• B) consider only monetary terms in their decisions.
• C) respond to incentives.
• D) are irrational.

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Definitions:

Cash Surrender Value

The amount of money an insurance company will pay to a policyholder if their policy is voluntarily terminated before its maturity or an insured event occurs.

Insurance Expense

The cost incurred by an entity to obtain insurance coverage for various risks.

Premium

The amount by which the price of a bond or security exceeds its principal amount or face value.

Underlying Assets

The financial assets upon which derivative instruments, such as options and futures, are based.