Is $1,000 received today worth as much as $1,000 received one year from now? Explain your answer
What will be an ideal response?
No, the timing of the payment is important in deciding its value today. If you receive $1,000 today you you could earn interest on the $1,000 for one year. For example, if the interest rate is 5% then $1,000 received today would be worth $1,000 x 1.05 = $1,050 in one year.
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The GATT prohibits quotas. Why didn't the United States or other countries try to stop the voluntary export restraint on automobiles implemented by the Japanese during the early 1980s?
a. At the time, the GATT did not prohibit quotas administered by the exporting country, that is, voluntary export restraints. b. Other countries did try to stop the voluntary export restraints but were unsuccessful in their efforts. c. The GATT only prohibited quotas after the WTO was established in 1995. d. The GATT only prohibits developing countries from using quotas.
The following table shows four firms, the amount each pollutes, the marginal cost for each firm to clean up pollution, and the total cost to each firm of eliminating all pollution.FirmTotal Discharge (in tons)Marginal Cost of Cleanup(per ton)Total Cost of CleanupA60$5.00$300B70$8.00$560C80$7.50$600D90$4.00$360The total discharge of these four companies is 300 tons. Assume there is no one else who pollutes. If the government establishes an effluent fee of $7.00 per ton, how much would the firms spend on reducing pollution?
A. $2,100 B. $660 C. $1,820 D. $1,710