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Economics: The Basics 1st Edition by Mike Mandel
Edition 1ISBN: 978-0071316026Economics: The Basics 1st Edition by Mike Mandel
Edition 1ISBN: 978-0071316026 Exercise 4
Suppose your discount factor is 0.95.
a) If someone offered you $100 today or $100 a year from now, which would you prefer?
b) If someone offered you $100 today or $120 a year from now, which would you prefer?
c) If someone offered you $95 today or $100 a year from now, which would you prefer?
d) Suppose your friend's discount factor is 0.80. Does she value the future more or less than you do?
a) If someone offered you $100 today or $100 a year from now, which would you prefer?
b) If someone offered you $100 today or $120 a year from now, which would you prefer?
c) If someone offered you $95 today or $100 a year from now, which would you prefer?
d) Suppose your friend's discount factor is 0.80. Does she value the future more or less than you do?
Explanation
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a)Discount factor is a number between 0 ...
Economics: The Basics 1st Edition by Mike Mandel
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