70.0k views
5 votes
Koren has no savings, spends her money as quickly as she earns it, and lives for today. How would you describe Koren's time perspective?

A) Future-oriented
B) Present-oriented
C) Past-oriented
D) Balanced

1 Answer

4 votes

Final answer:

Koren would be described as Present-oriented because she spends her money immediately rather than saving for the future. This behavior aligns with a preference for immediate rewards, which is explained by the concept of 'time preference' in behavioral economics.

Step-by-step explanation:

Koren appears to exemplify a Present-oriented time perspective with regard to her spending habits and financial planning. From an intertemporal choice perspective in financial capital markets, individuals like Koren who spend money as soon as they earn it are said to prioritize present consumption over future savings or investment. Individuals with a future-oriented time perspective would typically save more money, thereby forgoing some present consumption to increase their future consumption. A past-oriented perspective largely focuses on previous experiences but doesn't directly influence the present versus future consumption trade-off as much as the other two orientations.

Behavioral economics explains that Koren's spending behavior, which may seem irrational to traditional economists, is driven by her preference for immediate gratification. This choice could be different if she had preferences for future consumption. However, her attitude aligns well with those who value immediate rewards over potential future gains, which behavioral economics calls time preference.

User CraftWeaver
by
8.0k points