When economists say an individual possesses a "positive rate of time preference," they mean that she prefers to
a. save rather than consume.
b. invest now rather than in the future.
c. consume goods and services in the future rather than now.
d. consume goods and services now rather than in the future.
D
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The present value of a given payment in the future ________ when the interest rates fall
A) decreases B) reverts to the original value C) increases D) remains the same
Starting from long-run equilibrium, a large decrease in government purchases will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; lower; potential B. expansionary; higher; potential C. recessionary; lower; potential D. recessionary; lower; lower
Adam Smith believed that if people were free to pursue their own interests,
a. less would be produced than if government planners were in charge of the economy. b. the public interest would be served quite well. c. they would generally apply their talents to unproductive activities that would generate little value to society. d. they would have little incentive to undertake productive activities.
When what people pay does not necessarily reflect the real value they put on a good, it is likely that the:
A. good is nonrivalrous. B. good is easily excludable. C. free rider problem exists. D. good will be oversupplied.