Answered

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If an economist's job paid $50,000 a year 10 years ago, how would understanding the present value and future value of money help explain the difference in the pay rate for the same job today?

A. It would predict the future pay rate in 10 more years.
B. It would guarantee a fixed pay rate increase each year.
C. It would justify why the pay rate has more than doubled.
D. It would calculate the pay rate adjusted for economic changes.

Sagot :

GinnyAnsweridn

Final answer:

Understanding present and future value of money explains why pay rates for the same job can increase over time.


Explanation:

Understanding present value and future value of money helps explain the difference in pay rate for the same job today. Present value indicates that money today is worth more than money in the future due to factors like inflation and opportunity costs. This explains why pay rates for the same job can increase over time.


Learn more about Present Value and Future Value of Money here:

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