The Present Value of Receiving $200 One Year from Now

question 108

Multiple Choice

The present value of receiving $200 one year from now when the prevailing rate of interest is 8 percent is

• A)$192
• B)$185.19
• C)$200
• D)$208
• E)$160

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Definitions:

Producer Surplus

The difference between what producers are willing to accept for a good compared to what they actually receive, essentially measuring the benefit to producers from selling at the market price.

Consumer Surplus

The gap between the amount consumers are ready to spend on a good or service and the amount they end up paying.

Polluting Activity

Any activity by individuals, companies, or organizations that introduces contaminants into the environment, causing pollution and harm to ecosystems.

Corrective Taxes

Taxes designed to influence market outcomes by correcting for the effects of externalities, encouraging or discouraging certain behaviors.