As one progresses through his or her working life, the average income tends to _____, holding the level of education constant.
Question 13 options:
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Brett won a scholarship competition that will award him with $1,000 today and another $1,000 next year. What is the present value of the scholarship money if the interest rate is 10%? Question 14 options:
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13) If education is constant, then average income should fall with time because new information should be added in the pool of skills to have a higher income. Option B
14) present value of the scholarship money = 1000 + 1000/(1+10%) = 1000 + 909 = 1909. Option D
15) Firms also bear economic losses when there are more firms than what the market can accomodate. Option D
16) Higher interest rate will reduce the present value of human capital making it less worthwhile. Option C.
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