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    Principles of Macroeconomics Study Set 11
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    Exam 11: Money Demand and the Equilibrium Interest Rate
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    Assume That Sally Has a Chance to Purchase a Magazine
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Assume That Sally Has a Chance to Purchase a Magazine

Question 2

Question 2

Essay

Assume that Sally has a chance to purchase a magazine subscription for $240 for a year or choose to be billed on a monthly basis for $21. Why might choosing the $240 option not be the rational choice even though it appears to be $12 cheaper?

Correct Answer:

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