The Term "Present Value" Refers to the

question 46

Multiple Choice

The term "present value" refers to the

• A)value that a capital good will have in the future.
• B)current interest rate.
• C)current purchase price of a capital good.
• D)value today of a payment or receipt to occur in the future.
• E)value in the future of a payment made today.

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Definitions:

Net Investment

The total amount spent on new capital assets minus the depreciation on existing capital assets.

Autonomous Consumption

The part of consumption that does not change with income levels, representing basic necessities one must purchase regardless of income.

Long-Run Aggregate Supply Curve

A graphical representation showing an economy's potential output when all prices, including wages, can fully adjust to changes in the economic environment.

Business Taxes

Taxes that are required to be paid by businesses based on their income, property, and sometimes their sales.