Making Decisions

The decision-making process starts with gathering information.

• False
• True

Procrastination is an example of an economic influence on decision-making.

• False
• True

Higher interest rates result in higher costs of borrowing money

• False
• True

Rising prices causing lower buying power is referred to as an inflation risk.

• False
• True

Interest earned on savings may be referred to as the “time value of money.”

• False
• True

The final step of the decision-making process is:

• evaluating the results
• gathering information
• identifying the problem
• selecting the best course of action

Changes in the buying power of the dollar are measured by:

• the unemployment rate
• the money supply
• the consumer price index
• interest rates

Consumer spending is likely to rise when:

•  unemployment is high
• interest rates are low
• taxes rise
• . people are putting more money into savings accounts

Investments that may be difficult to convert to cash quickly have a high ___________ risk.

• inflation
• economic
• income
• liquidity

What a person gives up when making a decision is commonly called:

• the time value of money
• a personal risk
• an opportunity cost
• spontaneity