Suppose a Person Has a Discount Rate of Zero

question 92

Multiple Choice

Suppose a person has a discount rate of zero.This implies she

• A) places no value on the future.
• B) places no value on the present.
• C) values the present and the future equally.
• D) would not lend money at any positive interest rate.

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Definitions:

Profit Maximization

The technique a corporation employs to determine the pricing and level of output that maximizes earnings.

Vicious-Circle-Of-Poverty

A self-perpetuating condition where poverty leads to circumstances that perpetuate poverty, making it difficult to break the cycle.

Capital Stock

For a single firm, the current market value of the firm’s plant, equipment, inventories, and intangible assets.

Economic Policies

Strategies and decisions by governments concerning the monetary system, taxation, market regulations, and public spending to influence the economy.