Lottery winners who take the lump-sum payouts instead of payments spread out over many years:
A. believe the rate of return they could find in other financial assets is less than that implied in
the extended payout.
B. sacrifice free money and are making an economically irrational decision.
C. prefer immediate to delayed returns.
D. are only making a rational economic decision if there is rapid inflation.
C. prefer immediate to delayed returns.
You might also like to view...
What is the current equilibrium price level and real GDP for the economy illustrated in the figure above? Does this economy have an inflationary gap, a recessionary gap, or neither?
As it adjusts toward full employment, which curve shifts? What is the equilibrium real GDP and price level that the economy will ultimately reach?
Optimal constitutional rules should _____
a. be decided by a supermajority of the current legislature b. be decided by a majority of people in a society c. be agreed upon by a consensus of the writers of the constitution d. have the support of a consensus of people in a society
A 5 percent tax is going to be applied to a $100,000 tax base. What can be said about the revenue collected assuming dynamic tax analysis?
A) The total revenue will be zero. B) The total revenue will be between $0 and $5,000. C) The total revenue will be $5,000. D) There is not enough information to determine what revenues will equal.
Fractional reserve banking originated
A) when the United States Congress passed a law regarding the required reserve ratio. B) when goldsmiths realized they could issue warehouse receipts beyond gold on deposits. C) with the establishment of the Federal Reserve System. D) in the United States with the Clayton Act.