A mother gives her teenage daughter two choices: spend 20 minutes cleaning her room today or spend 25 minutes cleaning her room tomorrow. The same mother gives her same daughter two additional choices: clean out the garage for 20 minutes next Tuesday or 25 minutes next Wednesday. According to economic theory,
a. if the daughter chooses to procrastinate, she is behaving irrationally.
b. the daughter will likely choose to clean out her room tomorrow but clean out the garage next Tuesday.
c. the daughter will likely choose to clean out her room tomorrow and clean out the garage next Wednesday.
d. if the daughter chooses to procrastinate, she is exhibiting satisficing behavior.
b
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A financial crisis brought on by volatile capital flows
A) is usually inevitable given underlying conditions. B) does not happen to countries with strong international positions. C) is often preceded by capital inflows and an increase in foreign liabilities. D) is usually the result of high budget deficits.
The real balance effect works through a change in the value of
A) monetary assets in response to changes in the unemployment rate. B) nonmonetary assets in response to changes in the unemployment rate. C) monetary assets in response to changes in the price level. D) nonmonetary assets in response to changes in the price level.