Explain the role interest rates play in understanding the time value of money
What will be an ideal response?
The concept of interest is central in understanding the concept of the time value of money, which is the idea that a sum of money today is equivalent to a larger sum in the future due to interest rates. The interest rate determines how fast the amount of money that is invested will grow over time.
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Economists call the fact that the general public has little incentive to become informed about most political issues _____
a. rational ignorance b. irrational voting c. a diminishing political marketplace d. cyclical political institutions
To solve the common pool problem in fishing, governments can __________, or __________
a. impose a depletion tax; prohibit resource use entirely b. impose a depletion tax; restrict output c. introduce an offsetting positive externality; prohibit resource use entirely d. use a variable technology; impose a depletion tax e. restrict output; prohibit resource use entirely