Hw 3 Terms

Question 1

The allocation of resources maximizes the PV of NB’s from allocating the resources over time periods

Answer 1

Dynamically efficient

Question 2

The PV of FV of net benefits paid or received t years from today

Answer 2

PVNB

Question 3

Another word for int rate

Answer 3

Discount rate

Question 4

Discounting from the perspective of an individual or firm 

Answer 4

Private discounting 

Question 5

Discounting from society as a whole perspective of normative economics 

Answer 5

Social discounting 

Question 6

The discount rate used for social discounting 

Answer 6

Social discount rate

Question 7

Applies to projects that may have decades, long time spans, but limited impacts on generations yet unborn 

Answer 7

Intra-generational discounting

Question 8

Applies to extremely long time horizons when their impact on future generations 

Answer 8

Inter-generational discounting

Question 9

Pre- tax return to private capital

Answer 9

Social opp cost of private capital

Question 10

Pre-tax return to risk-free assets

Answer 10

Social rate of time preference

Question 11

The economy is assumed to operate, as if a single representative agent chooses his time path of consumption and savings to maximize the net present value of the flow of utility from consumption overtime 

Answer 11

Ramsey rule for inter generational discount rate