If the opportunity cost of money is zero, the expected value of future dollars is equal to their present value.
Answer the following statement true (T) or false (F)
True
A dollar received today is worth more than a dollar received two years from today because it can be saved in an interest-bearing account and in two years you'll have your original dollar plus accumulated interest. However, if the interest rate (opportunity cost of money) is zero, the dollar today is worth the same amount as a dollar two years from now.
You might also like to view...
In a perfectly competitive market, the average revenue curve of a firm is
A) the same as its total revenue curve. B) the same as its demand curve. C) the same its economic profits. D) the difference between its total revenue curve and its marginal revenue curve.
A proportional tax:
A. takes the same percentage of taxes from income from all taxpayers. B. requires those with low incomes to pay a smaller percentage of their income than high-income people. C. is levied so that low-income taxpayers pay a greater proportion of their income toward taxes than high-income taxpayers. D. taxes everyone the same amount, regardless of their income.
If there are only two goods in the economy, one whose price rises by 8 percent and one by 10 percent, it is possible that inflation is:
A. 2 percent. B. 9 percent. C. 10 percent. D. 8 percent.
In natural and platform monopolies, economists argue that regulation:
A. is not explicitly desirable, and society should rather rely on direct competitive forces. B. is desirable, and should involve strict enforcement. C. is irrelevant. D. should be heavily enforced by government.