Multiple Choice
Today , a friend asks you to agree to pay $y in 5 years and receive $x in year 7. Your analysis concludes that x[1 / (1 + r) ⁷] > y[1 / (1 + r) ⁵] and, furthermore, that x[1 / (1 + r) ²] > y. Your decisions are
A) hyperbolic
B) time consistent
C) time inconsistent
Correct Answer:
Verified
Correct Answer:
Verified
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