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Principles of Financial Planning

Question 3 • Personal Finance - EL3403

If you buy a new video game, you cannot pay your cell phone bill. This is an example of .

Answer
A
setting a short-term goal
B
setting a long-term goal
C
realizing opportunity cost

Explanation

Opportunity cost is the value of the next best choice you give up when you spend money or use resources. Buying the video game means giving up the ability to pay your cell phone bill, so this is realizing opportunity cost.

AI-written and checked against the verified answer.

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