Question

Suppose that some investors have decided that economic and financial uncertainty have made the prospect of investing in domestic stock markets more risky than investing in foreign stock​ markets, and therefore choose to invest in foreign markets. By using all available information as they act to achieve their​ goals, these investors are exemplifying the economic idea that
Select one:A. people are rationalB. people respond to economic incentivesC. optimal decisions are made at the marginD. equity is more important than efficiency.

Answer 1

Answer:

People are rational

Explanation:

Rational behavior is referred to in the decision-making process that is based on making choices that result in the optimal level of benefits and utility for individuals. The assumption of individuals' behaviors implies that people would rather be better than worse off. Most conventional theories are based on the assumption that all individuals taking part in action or activity are behaving rationally. The basic rationale behavior is also a key assumption of the rational choice theory, an economic principle that assumes individuals always make a prudent and logical decision that provides people with the greatest benefits or satisfaction. Rational behavior doesn't always require a [person to attempt in more returns. The optimal return for an individual may involve non-monetary returns and risk considerations.