What is the formula for the present value of $1 one year from now? If the rate of interest is 5 percent, what is the present value of $10 to be paid one year from now?
What will be an ideal response?
The formula for the present value of $1 one year from now is $1/(1 + r) where r is the market rate of interest. If the interest rate is 5 percent, the present value of $10 to be paid one year from now is $9.52 .
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Investment (I) in the United States may increase with either an increase in national saving or an increase in net foreign investment
Indicate whether the statement is true or false
Which of the following is not an argument in favor of export promotion over import substitution?
(a) international competition compels domestic producers to become more efficient. (b) exposure to world markets provides greater opportunities to learn new technologies. (c) producing for export permits greater specialization and economies of scale. (d) outward-looking development promotes larger firms.