Matt has $2000 saved up for Spring Break.Over Christmas break he decides to spend $400 of it on gifts instead of putting the gifts on his credit card and gradually replaces it in his Spring Break savings over the next few months.An economist would say this behavior is:

Question

Quizplus · Accepted Answer

The economist would see this behavior as rational because Matt prioritized paying for his gifts in cash (using his savings) instead of using credit and paying interest on it over time. He also gradually replaced the amount he spent, showing a level of responsible financial planning.

Matt Has $2000 Saved Up for Spring Break