Money Received Today Is Worth More Than the Same Amount

question 93

Multiple Choice

Money received today is worth more than the same amount of money received in the future. This is true because

• A) money received today can grow at a compounded rate.
• B) inflation will devalue future dollars.
• C) generally, goods and services will cost more in the future.
• D) All of these.

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Definitions:

Currency

A system of money in general use in a particular country or economic context, serving as a medium of exchange for goods and services.

Interest

The cost of borrowing money or the payment received for lending money, typically expressed as a percentage of the principal amount per year.

Human Capital

The collective skills, knowledge, abilities, and experience of an individual or workforce, representing a form of wealth that can be directed towards economic activities.

Physical Capital

Tangible assets that are used in the production of goods and services, such as machinery, buildings, and equipment.