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.

---

Definitions:

Percentage Rise

A measure of how much a quantity increases over a period, expressed as a percentage of the initial value.

Equation of Exchange

An economic formula representing the relationship between the money supply, its velocity, the price level, and the number of transactions in an economy: MV = PQ.

Economy Output

The total value of all goods and services produced by an economy over a specific time period, also known as gross domestic product (GDP).

Equation of Exchange

The Equation of Exchange is an economic identity that relates the supply of money in an economy to the value of goods and services transactions, commonly represented as MV = PQ.