Most People Have a Time Preference

question 126

Multiple Choice

Most people have a time preference.Since this is true:

• A) they must earn interest to consume now (save later) and are willing to pay interest to consume later (save now).
• B) they must be paid interest to consume later (save now) and are willing to pay interest to consume now (save later).
• C) they are willing to accept simple interest in the short run but only compound interest in the long run.
• D) they will accept positive rates of interest on checking accounts and negative rates of interest on savings accounts.
• E) they prefer more free time to less free time.

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Definitions:

Foreign Currency Valuations

The process of determining the value of foreign currencies in comparison to one's own currency for financial reporting and trading.

Globalizing Operations

The process of expanding business operations across international borders, aiming for a global presence and market.

Individualism

A cultural orientation in which people belong to loose social frameworks and their primary concern is for themselves and their families.

Social Framework

The structure of societal norms and institutions that guide and govern the behavior of individuals within a community.