The following figure (Figure 10.4 on your textbook) shows the present value of 1 dollar of climate damages, as a function of the year the damages took place. What can this graph be used to calculate, based on different rates?     a. the social cost of carbon   b. growth discounting   c. inflation   d. time discounting

Managerial Economics: A Problem Solving Approach
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ISBN:9781337106665
Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Chapter21: Getting Employees To Work In The Firm’s Best Interests
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The following figure (Figure 10.4 on your textbook) shows the present value of 1 dollar of climate damages, as a function of the year the damages took place. What can this graph be used to calculate, based on different rates?



 

  a.

the social cost of carbon

  b.

growth discounting

  c.

inflation

  d.

time discounting

 
1.0
3 percent discount rate
1 percent discount rate
0.8
0.6
0.4
0.2
0.0
2000
2050
2100
2150
2200
2250
2300
Present value ($)
Transcribed Image Text:1.0 3 percent discount rate 1 percent discount rate 0.8 0.6 0.4 0.2 0.0 2000 2050 2100 2150 2200 2250 2300 Present value ($)
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