President Ronald Reagan Once Joked That a Trivial Pursuit Game

question 17

Multiple Choice

President Ronald Reagan once joked that a Trivial Pursuit game designed for economists would

• A)have no questions but hundreds of answers.
• B)have 100 questions and 3,000 answers.
• C)have 1,000 questions but no answers.
• D)never produce a winner.

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Definitions:

Discounting

The procedure used to calculate the present value of future income, which is inversely related to both the interest rate and the amount of time that passes before the funds are received.

Present Value

The current worth of a future sum of money or stream of cash flows, given a specified rate of return.

Discounting

The process of determining the present value of future cash flows by applying a particular interest rate; often used in investment and finance.

Present Value

The value today of a future amount of money or sequence of cash inflows, accounting for a defined rate of return.