With a Constant Nominal Interest Rate Equal to I,the Present

question 81

Multiple Choice

With a constant nominal interest rate equal to i,the present discounted value of $1.00 to be received 4 years from today is equal to

• A)1 + i.
• B)i⁴.
• C)(1 + i)⁴.
• D)1 / (1 + i)⁴.
• E) 4(1 + i).

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Definitions:

Nominal Wage

The amount of money paid to an employee without adjustments for inflation or purchasing power, expressed in current currency terms.

Real Wage

The purchasing power of an individual's earnings, taking into account the effects of inflation.

Aggregate Supply

The cumulative supply of products and services planned for sale by firms in an economy within a specific time period.

Cyclical Unemployment

Unemployment caused by a downturn in the economic cycle, such as a recession, which reduces the demand for goods and services.