The Future Value of an Ordinary Annuity of $1,000 Each

question 89

Multiple Choice

The future value of an ordinary annuity of $1,000 each year for 10 years, deposited at 3 percent, is ________.

• A) $11,808.
• B) $11,464.
• C) $ 8,530.
• D) $10,000.

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Definitions:

Backward-Bending

Refers to a labor supply curve that bends backwards at higher wage rates, indicating that higher wages can lead to less labor supplied due to increased leisure preference.

Substitution Effect

A change in consumption patterns due to a change in the relative prices of goods, leading consumers to substitute one good for another.

Income Effect

The alteration in a person's or an economy's earnings and its effect on the amount of a good or service they want to purchase.

Labor Supply Curve

Represents the relationship between the wage rate and the quantity of labor that workers are willing to supply, typically showing that higher wages attract a larger labor supply.