What Term Do Economists Use to Describe the Relative Value

question 68

Multiple Choice

What term do economists use to describe the relative value of present consumption versus future savings?

• A) future wage incentive
• B) discount rate
• C) long-term matches
• D) future interest yields

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Definitions:

Diversification

The strategy of spreading investments across various financial assets to reduce exposure to risk.

Uncorrelated

Refers to two or more variables that do not have any predictive relationship with each other.

Negatively Correlated

A relationship between two variables in which one variable increases as the other decreases.

Positively Correlated

A term describing two variables that move in the same direction, such that when one variable increases, the other also increases.