Homework Answers
Social discount rate vary over time.
This is the discount rate used in projects that involve cost benefit analysis. They are projects that involve the resources used by both present generation and future generation and these use social discount rate for finding the present value of future projects. Different economies have different social discount rate for different projects that can vary over time.
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QUESTION 36 Is the social discount rate a constant value? Yes, it is always positive No,...
QUESTION 34 What is abatement? Getting used to climate change Reducing damages by mitigation Not emitting...
QUESTION 34 What is abatement? Getting used to climate change Reducing damages by mitigation Not emitting carbon Cleaning up damages from emissions QUESTION 35 Which of the following is not an economic metric for estimating climate change damages? Social damage as a function of GDP social cost of carbon O optimal temperature conditional on abatement and damage total stock of carbon emissions QUESTION 36 Is the social discount rate a constant value? Yes, it is always positive No, it can...
Question Completion Status: QUESTION 31 Why is abatement so important? Because it can offset damages Because...
Question Completion Status: QUESTION 31 Why is abatement so important? Because it can offset damages Because requires us to give up resources in the present Because it reduces the need to adapt All of the above QUESTION 32 Why do individual people discount the future? they think the future will be worse they think the future is worth more than the present they are impatient the present is uncertain QUESTION 33 What do inwestors discount the future? they think investments...
QUESTION 19 What is the pure rate of time preference? O The value placed on consumption...
QUESTION 19 What is the pure rate of time preference? O The value placed on consumption The social discount rate O The value placed on each generation The discounted value of economic growth
QUESTION 18 What effect does uncertainty have on your estimate of the social discount rate? O...
QUESTION 18 What effect does uncertainty have on your estimate of the social discount rate? O No effect O Increases it O Reduces it O It depends on the type of uncertainty
D | Question 2 1 pts In the "Ramsey Rule" for deriving a social discount rate, the parameter 8 (i.e. the pure r...
D | Question 2 1 pts In the "Ramsey Rule" for deriving a social discount rate, the parameter 8 (i.e. the pure rate of time preference) reflects our innate preference for the present over the future. Where does this preference come from? O Our sense of morbidity O Our sense of impatience. O Our sense of mortality e All of the above.
D | Question 2 1 pts In the "Ramsey Rule" for deriving a social discount rate, the parameter...
QUESTION 26 What is a generally accepted value for the social discount rate? 3% 20% 2.00%...
QUESTION 26 What is a generally accepted value for the social discount rate? 3% 20% 2.00% 0.20% 0%
The relationship between the two key elements of the constant dividend growth model is Question 9...
The relationship between the two key elements of the constant dividend growth model is Question 9 options: that Dt+1 is less than the prior one, Dt. that the growth rate is always positive and greater than the discount rate. assumes the growth rate is always less than the discount rate. the long run growth rate is postive Both B and D.
QUESTION 24 The social discount rate is not the same as the market interest rate. Why?...
QUESTION 24 The social discount rate is not the same as the market interest rate. Why? O capital markets adjust to all risks o market interest rates reflect the demand for all investments O capital markets are not perfect capital markets are uncertain
Conceptual Overview: Explore how the value of a stock changes as a function of the discount...
Conceptual Overview: Explore how the value of a stock changes as a function of the discount interest rate. - $1.15 and an anticipated growth rate of g The blue stair-step line depicts the value of future stock dividends. The orange stair-step line depicts the present value of those future dividends discounted by r, for a stock with initial dividend D -4%. Use the slider to changer, and observe the corresponding changes in the equilibrium price of the stock. Po =...
answer all QUESTION 14 The discount rate is the interest rate that O the Fed charges...
answer all
QUESTION 14 The discount rate is the interest rate that O the Fed charges on loans made to the government. O member banks charge on loans made to the Fed. O the government charges on loans made to the Fed. the Fed charges on loans made to member banks. QUESTION 15 The slope of the aggregate demand curve indicates that, as the price level increases, O the aggregate demand curve shifts rightward. O the real GDP demanded decreases....
QUESTION 34 What is abatement? Getting used to climate change Reducing damages by mitigation Not emitting carbon Cleaning up damages from emissions QUESTION 35 Which of the following is not an economic metric for estimating climate change damages? Social damage as a function of GDP social cost of carbon O optimal temperature conditional on abatement and damage total stock of carbon emissions QUESTION 36 Is the social discount rate a constant value? Yes, it is always positive No, it can...
Question Completion Status: QUESTION 31 Why is abatement so important? Because it can offset damages Because requires us to give up resources in the present Because it reduces the need to adapt All of the above QUESTION 32 Why do individual people discount the future? they think the future will be worse they think the future is worth more than the present they are impatient the present is uncertain QUESTION 33 What do inwestors discount the future? they think investments...
QUESTION 19 What is the pure rate of time preference? O The value placed on consumption The social discount rate O The value placed on each generation The discounted value of economic growth
QUESTION 18 What effect does uncertainty have on your estimate of the social discount rate? O No effect O Increases it O Reduces it O It depends on the type of uncertainty
D | Question 2 1 pts In the "Ramsey Rule" for deriving a social discount rate, the parameter 8 (i.e. the pure rate of time preference) reflects our innate preference for the present over the future. Where does this preference come from? O Our sense of morbidity O Our sense of impatience. O Our sense of mortality e All of the above.
D | Question 2 1 pts In the "Ramsey Rule" for deriving a social discount rate, the parameter...
QUESTION 26 What is a generally accepted value for the social discount rate? 3% 20% 2.00% 0.20% 0%
QUESTION 24 The social discount rate is not the same as the market interest rate. Why? O capital markets adjust to all risks o market interest rates reflect the demand for all investments O capital markets are not perfect capital markets are uncertain
Conceptual Overview: Explore how the value of a stock changes as a function of the discount interest rate. - $1.15 and an anticipated growth rate of g The blue stair-step line depicts the value of future stock dividends. The orange stair-step line depicts the present value of those future dividends discounted by r, for a stock with initial dividend D -4%. Use the slider to changer, and observe the corresponding changes in the equilibrium price of the stock. Po =...
answer all
QUESTION 14 The discount rate is the interest rate that O the Fed charges on loans made to the government. O member banks charge on loans made to the Fed. O the government charges on loans made to the Fed. the Fed charges on loans made to member banks. QUESTION 15 The slope of the aggregate demand curve indicates that, as the price level increases, O the aggregate demand curve shifts rightward. O the real GDP demanded decreases....
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