In the Two-Period Model, Suppose a Household's Income in Period

question 23

Multiple Choice

In the two-period model, suppose a household's income in period one is $30,000 and its income in period two is $40,000.Also assume that the household face the real interest rate of 25 percent.What is the present value of the
Household's income?​

• A)​$62,000
• B)​$46,000
• C)​$20,000
• D)​$30,000

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Definitions:

Public Ownership

The ownership of assets by the government or public entities rather than by private individuals or companies.

Productive Resources

The factors required for the production of goods and services, usually classified into land, labor, capital, and entrepreneurship.

Self-Interest

The personal interest or advantage that individuals seek to maximize their own welfare or benefit.

Public Good

A product or service that is available for all people to consume, regardless of who pays for it, and where one person's consumption does not reduce availability to others.