Why would the economics discipline assume that generally people have a positive rate of time preference? (mark all that apply) D Future money and present money are the same: a dollar is the same today as it is one year from now. The future is uncertain, so consumers value money today more than money in the future. OYoung consumers generally have lower income than they expect to have in the future. so money today is more valuable to them than money in the future. Money/resources can be used to innovate and create more value in the future (investment by businesses). Young consumers generally prefer money in the future than money in the present because they are young and have many years ahead of them,

Why would the economics discipline assume that generally people have a positive rate of time preference? (mark all that apply) D Future money and present money are the same: a dollar is the same today as it is one year from now. The future is uncertain, so consumers value money today more than money in the future. OYoung consumers generally have lower income than they expect to have in the future. so money today is more valuable to them than money in the future. Money/resources can be used to innovate and create more value in the future (investment by businesses). Young consumers generally prefer money in the future than money in the present because they are young and have many years ahead of them,

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter27: Money And Banking

Section: Chapter Questions

Problem 6SCQ: Imagine that you are in the position of buying loans in the secondary market (that is, buying the...

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What do economists mean by the "time value of money"? O A. The way that the value of a payment changes depending on when the payment is received. B. The fact that it takes time to make money. OC. The fact that money has value only if you have the time to enjoy it.
Question 3 In Germany, banks are paying a positive interest rate on peoples' savings, as a result O a. Savers are worse off if the inflation rate in Germany is zero O b. Savers are better off if the inflation rate in Germany exceeds the nominal interest rate Oc. Savers are worse off if the deflation rate in Germany is zero O d. Savers are better off if the deflation rate in Germany is zero
Exercise 2 Suppose that money demand is given by MD= $Y(0.25 – i) where $Y is $100. Also, suppose that the supply of money is $20. a. What is the equilibrium interest rate? b. If the Federal Reserve Bank in the USA wants to increase i by 10 percentage points, at what level should it set the supply of money?
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How should an increase in inflation affect the interest rate on an adjustable-rate mortgage?
Imagine that you are in the position of buying loans in the secondary market (that is, buying the right to collect the payments on loans) for a bank or other financial services company. Explain why you would be willing to pay more or less for a given loan If: The borrower has been late on a number of loan payments Interest rates In the economy as a whole have risen since the bank made the loan The borrower Is a firm that has just declared a high level of profits Interest rates in the economy as a whole have fallen since the bank made the loan
A Suppose the difference between the transactions velocity and the income velocity of circulation of money in an economy is 5 and the money value of total transactions is 6 times the money value of aggregate income. If the quantity of money in circulation is 1000 currency units, then the money value of aggregate income in currency units is (a) 1000 (b) 1200 (c) 1500 (d) 1800
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