If Tonya as a Municipal Engineer Evaluates a Project Which

question 42

Multiple Choice

If Tonya as a municipal engineer evaluates a project which is subject to the effect of inflation, she should

• A)work with nominal values for cash flows and nominal interest rates.
• B)work with real values for cash flows and nominal interest rates.
• C)work with nominal values for cash flows and real interest rates.
• D)work with constant values for cash flows and current interest rates.
• E)rely on forecast of future interest rates and cash flows in real or nominal terms.

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Definitions:

Conditioned Stimulus (CS)

In classical conditioning, a previously neutral stimulus that, after becoming associated with the unconditioned stimulus, triggers a conditioned response.

Unconditioned Stimulus

A stimulus that naturally and automatically triggers a response without any learning needed.

Pavlovian Conditioning

A learning process that involves associating a previously neutral stimulus with an unconditioned stimulus to elicit a conditioned response similar to the unconditioned response.

Conditioned Stimulus (CS)

A previously neutral stimulus that, after being repeatedly presented prior to an unconditioned stimulus, elicits a conditioned response.