Economic agents are utility maximisers. Every time we make a choice we select the alternative which yields the greatest utility, subject to the resources available. Sometimes the utility which we derive is enjoyed in the short run (like a take-away meal); sometimes it is enjoyed over a longer period (like household durable goods). In all cases, though, the decision is made on the basis of the discounted stream of expected utility over the period from the present up to the time horizon.
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