The present value of a future sum of money is the amount that, if invested today, will grow
A) as large as that future sum, given the interest rate.
B) at a constant rate forever.
C) as large as that future sum, less taxes payable.
D) as large as that future sum, if the interest rate is zero.
A
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According to Keynesian theory, the most important determinant of saving and consumption is
A) the stock of durable goods in the consumer's possession. B) the stock of liquid assets. C) the level of real disposable income. D) the level of consumer indebtedness.
Figure 11-3
In Figure 11-3, which line represents the change in the consumption schedule caused by a cut in fixed taxes?
a.
C1 in graph (a)
b.
C2 in graph (a)
c.
C1 in graph (b)
d.
C2 in graph (b)
Describe the structure of the Fed's Open Market Committee (FOMC). What is this committee's primary responsibility?
What will be an ideal response?
Write down the national savings and investment identity.
What will be an ideal response?