1. If the interest rate is 10%, what is the present discounted value of receiving $100 next year?
A. $10.00
b. $90.00
c. $90.91
d. $110.00
e. $111.11
2. As of 2006, the present discounted value of the long-run fiscal imbalance of Social Security and Medicare programs is approximately:
a.$6 trillion
b. $40 trillion.
c. $102 trillion
d. $106 trillion
e. $143 trillion.
3. If debt is a nominal obligation to borrowers, which of the following is true?
a. Debt is irrelevant for government.
b. Inflation decreases the burden of the national debt.
c. Inflation increases the burden of the national debt.
d. Deflation increases the burden of the national debt. Both b and d are correct.