The rate of discount is best described as the rate of
A) return on physical capital after the cost of capital has been removed.
B) return on financial assets after an inflation adjustment has been made.
C) interest used to derive the present values of future sums.
D) return on financial capital that has not been adjusted for inflation.
Answer: C
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Human capital is the amount of
a. capital available to workforce. b. skill embodied in the workforce. c. output the labor force can produce. d. healthy work force in the total population.
An increase in the real risk-free interest rate causes the:
a. Preferred asset ratio for currency in circulation (C/D) to fall, which decreases the quantity of real loanable funds supplied. b. Preferred asset ratio for customary reserves (U/D) to fall, which increases the quantity of real loanable funds supplied. c. Preferred asset ratio for near money (N/D) to fall, which decreases the quantity of real loanable funds supplied. e. None of the above.