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Questions and Answers
What do individuals tradeoff by saving money instead of spending it?
What do individuals tradeoff by saving money instead of spending it?
- Present consumption for present consumption
- Future consumption for future consumption
- Present consumption for larger future consumption (correct)
- Future consumption for present consumption
How is the pure rate of interest determined?
How is the pure rate of interest determined?
- Government regulations
- Individual investor preferences
- Global demand-supply balance
- Market forces (correct)
What gives rise to an interest rate referred to as the pure time value of money?
What gives rise to an interest rate referred to as the pure time value of money?
- Global economic growth rates
- Difference for borrowing today and desire for surplus on savings (correct)
- Inflation rate fluctuations
- Government fiscal policies
What contributed to the decline in Real Rate of Return?
What contributed to the decline in Real Rate of Return?
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What has been a trend in investment rates in advanced economies since the global financial crisis?
What has been a trend in investment rates in advanced economies since the global financial crisis?
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