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Buddy Has $2000 in a Checking Account and Wants to Buy

Question 96

Multiple Choice

Buddy has $2000 in a checking account and wants to buy a new MacBook for $1100.Buddy decides he needs the money in his account to pay his bills next month and so puts the $1100 on his credit card and pays it off gradually over the next several months.Buddy choosing to "save" his cash on hand for everyday expenses is:


A) irrational, since money is fungible.
B) rational, since Buddy can now pay all his bills with a small credit card payment each month.
C) going to make Buddy wealthier in the long run.
D) rational, since he has his new computer and has money in the bank.

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