The lottery this evening is worth $50 million dollars in your state. There are two people in your neighborhood that are buying lottery tickets. One is a student with little financial knowledge or business acumen
The other is a successful entrepreneur that is earning 20% rate of return on his business. Which of these people is likely to check off the "cash" option on the ticket and which is likely to choose the structured payout and why?
It is more likely that the entrepreneur will choose the cash option because he can invest this money in his business and earn a handsome return. The present discounted value of the structured payout is likely to be less than the cash option. Just the opposite is likely to be true for the student.
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For a given nominal exchange rate and foreign price level, an increase in the domestic price level ________ the real exchange rate.
A. offsets any change in B. increases C. may either increase or decrease D. decreases
If dividend income increases, the following does not happen
A) the consumer chooses to consume more leisure. B) the consumer chooses to consume more consumption goods. C) the budget constraint shifts to the right. D) the substitution effect exceeds the income effect.
A specialized worker doesn't spend time switching from one task to another. This source of productivity increase is called:
A. continuity. B. innovation. C. functionality. D. repetition.
The lowest percentage of the U.S. population in poverty is found when using which measurement of household resources?
A) private income only B) private income plus cash benefits C) private income with cash and in-kind benefits D) private income with Social Security payments subtracted