Rational Ignorance Is When

question 38

Multiple Choice

Rational ignorance is when:

• A) full information is not available.
• B) the benefit of becoming fully informed is lower than the cost.
• C) the cost of information is low.
• D) there is no benefit to gathering additional information.

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Definitions:

Required Reserves

The minimum amount of deposits that a bank must hold in reserve and not lend out, as mandated by central banking regulations.

Excess Reserves

The amount of reserves that banks hold beyond the required minimum to meet potential withdrawals by customers.

Liquid Asset

Assets that can be quickly and easily converted into cash without significant loss in value.

Store Of Value

An asset that can be saved, retrieved, and exchanged at a later time, and is predictably useful in the future to purchase goods and services.