Which Case Is the Most Exploitative

question 84

Multiple Choice

Which case is the most exploitative?
I. Phil buys a kidney from Ron.
II. Phil pays Ron to cut his lawn.
III. Phil pays Ron for tax advice.

• A) I only
• B) II only
• C) III only
• D) None of the cases are exploitative; they all represent voluntary market exchanges that make both parties better off.

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Definitions:

Forward Rate

The predetermined interest rate for a future financial transaction, agreed upon today.

Short Rate

A one-period interest rate.

Term Structure

The arrangement or relationship between interest rates and the time to maturity of debt securities.

Interest Rates

The cost of borrowing money or the return on an investment, usually expressed as a percentage per annum.