Rational individuals prefer to consume goods during the current year rather than in the future because of:

Question

Quizplus · Accepted Answer

Positive time preference is the preference for present consumption over future consumption. This is because people prefer to enjoy goods and services now rather than wait for the future. Positive consumption preference (B) is not a commonly used term and is not a valid reason for preferring current consumption. High expected rate of inflation (C) would actually make individuals want to consume less now and save for the future, as their money's purchasing power would decrease over time. High market rate of interest (D) could incentivize saving rather than spending, as individuals could earn more money by investing their savings rather than spending them immediately.

Rational Individuals Prefer to Consume Goods During the Current Year