A Lower Discount Rate Applied to a Given Flow of Returns

question 11

Multiple Choice

A lower discount rate applied to a given flow of returns in the future

• A) remain unchanged if the future dollars do not change.
• B) increase.
• C) decrease.
• D) change in a direction that cannot be determined in general.
• e.g., $5,000 at the end of 5 years, $10,000 at the end of 10 years, $15,000 at the end of 15 years, etc.) will cause the present value of that flow to:

Understand how various factors have influenced the rising costs of health care in the U.S.

Grasp the impact and objectives of the Patient Protection and Affordable Care Act.

Comprehend the role of health insurance and its effects on health care consumption.

Recognize the relationship between health care costs and the structure of employment.

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Definitions:

Full Employment

This term refers to the condition where all available labor resources are being used in the most economically efficient way, with no involuntary unemployment.

Production Possibilities Curve

A graph that shows the different quantities of two goods that an economy can produce with fixed resources and technology.

Human Economic Wants

Desires that require resources to satisfy, emphasizing the economic aspect of needs and desires.

After-Tax Income

The amount of net income left after all taxes have been deducted.