Question

money has a time value because as the time progresses, its value ......due to inflation and...

money has a time value because as the time progresses, its value ......due to inflation and .....due to earning power

1- decrease - increase
2- decrease - decrease
3- increase - decrease
4- increase - increase

help

Business   Economics   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Money has a time value because as time progress:

Its value Decreases due to inflation because inflation cause requirement of more money to buy a particular good than what required currently that is suppose a good is price at $6 and due to inflation after 3 years it priced at $10 this implies that more amount of money is required for the same good which implies that value of money decreases.

Its value Decreases due to earning capacity because sooner a person get money the more it can earn in the form of interest rate.

Money has a time value because as the time progresses, its value Decreases due to inflation and Decreases due to earning power.

Option 2nd Decreases, Decreases is the correct answer

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
1) Money is __________ store of value because of __________. Select one: a. not a; inflation...
1) Money is __________ store of value because of __________. Select one: a. not a; inflation b. a perfect; inflation c. an imperfect; inflation d. a perfect; its universal acceptance 2) Suppose an economy is at full-employment equilibrium at a GDP of $25 billion and investment declines by $4 billion. According to Keynes, this economy will: Select one: a. Reach a new equilibrium at a level of output between $21 billion and $25 billion. b. Reach a new equilibrium at...
Investment depends on the _______ interest rate because higher inflation will _______ the value of the...
Investment depends on the _______ interest rate because higher inflation will _______ the value of the dollars with which the firm will repaythe loan. A)real, decrease B)real, increase C)nominal, decrease D)nominal, increase
It is important to understand the concept of inflation along with present value and future value...
It is important to understand the concept of inflation along with present value and future value of money as Saudi Arabia will be moving towards Saudi vision because time value of money will be providing us with the better idea of valuation of money in context of the time because it advocates that the similar amount of money today is having a higher worth than the similar money of amount tomorrow because of factors like inflation and other factors which...
1. Which of the following factors affect the cost of money? Time preference for consumption Inflation...
1. Which of the following factors affect the cost of money? Time preference for consumption Inflation Risk Production Opportunities All of the above Choice 1, 2 and 3 only. 2. Which of the following would cause the interest rates to increase in the near future The government doubles the amount of money added to the economy. The economy starts to slide into a recession. Concern increases regarding the national security of the US (i.e. the risk associated with investing in...
3 ) If there is inflation : A ) the unit of account function of money...
3 ) If there is inflation : A ) the unit of account function of money is improved B ) the unit of account function of money is undermined. C ) the distributional function of money is improved D ) the distributional function of money is undermined. ______________________________________________________________ 4 ) Currently if inflation is 2% and the goods inflation target is 2.5%, policymakers A ) congratulate themselves for coming in under their target. B ) are unhappy because they have...
1.) Money’s real value will change based on inflation. High inflation will _____ the real value....
1.) Money’s real value will change based on inflation. High inflation will _____ the real value. As a result of the change in the real value of money short-run equilibrium output will _____. reduce; increase increase; decrease reduce; decrease increase; increase 2.) Planned aggregate expenditures need to change by $300 billion. The mpc = 0.60. A Keynesian economist would say government spending needs to change by ______ OR taxes need to change by _______. $20.5 billion; $20.5 billion $300 billion;...
Mastery Problem: Time Value of Money Time value of money Due to both interest earnings and...
Mastery Problem: Time Value of Money Time value of money Due to both interest earnings and the fact that money put to good use should generate additional funds above and beyond the original investment, money tomorrow will be worth less than money today. Simple interest Ringer Co., a company that you regularly do business with, gives you a $18,000 note. The note is due in three years and pays simple interest of 5% annually. How much will Ringer pay you...
The FOMC is concerned about inflation and has ________ the federal funds rate. Due to substitution...
The FOMC is concerned about inflation and has ________ the federal funds rate. Due to substitution effects, other ________ interest rates will ________ almost immediately. A. increased; short-term; decrease B. increased; long-term; increase C. decreased; long-term; decrease D. decreased; short-term; decrease E. increased; short-term; increase
Time affects the value of financial transactions because: Select one: A. there is an opportunity cost...
Time affects the value of financial transactions because: Select one: A. there is an opportunity cost to a lender when he/she lends money B. inflation makes money worth more over time. C. it takes time to gather information about financial transactions. D. very wealthy people require compensation for holding their money.
Chapter 11, 12: Money and Inflation I. If the head of the central bank wants to...
Chapter 11, 12: Money and Inflation I. If the head of the central bank wants to expand the supply of money, which of the following would do it? Explain how the policy impacts the money supply, and find the policies that might increase the money supply. 1. Increase the required reserve ratio 2. Decrease the required reserve ration 3. Increase the discount rate 4. Decrease the discount rate 5. Buy government securities in the open market 6. Sell government securities...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT