The term time inconsistency is used to describe:
A. people's inability to make choices today that determine their actions in the future.
B. people's inability to correctly predict how their current choices will affect them in the future.
C. a situation in which we regret choices we make simply because of when we made the choice.
D. a situation in which we change our minds about what we want simply because of the timing of the decision.
Answer: D
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In order to draw an individual's budget line, we must know
A) prices and preferences. B) prices and income. C) income and preferences. D) prices, income, and preferences.
Assumptions for economic theories and models should be
A) rejected if they are not totally realistic. B) logical rather than empirically testable. C) simple and reasonable rather than complex. D) maintained until overwhelming evidence to the contrary occurs.