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You Just Won the Lottery

question 140

Essay

You just won the lottery.You can take your $2 million in a lump sum today,or you can receive $220,000 per year over the next 12 years.Assuming a 6% interest rate,which would you prefer,ignoring tax considerations?


Definitions:

Minimum Wage

The lowest legal hourly pay rate that employers can pay their workers.

Binding Price Floor

A minimum price set by the government above the equilibrium price, causing a surplus.

Minimum Wage

The lowest hourly, daily, or monthly remuneration that employers are legally allowed to pay their workers.

Market-Clearing

Market-Clearing is the process by which market supply and demand are brought into balance at the equilibrium price, ensuring all goods produced are sold.

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