If a saver has a positive rate of time preference then the present value of $100 to be received 1 year from today is:
A) more than $100.
B) not calculable.
C) less than 100.
D) unknown to the saver.

Question

Quizplus · Accepted Answer

A positive rate of time preference means that the saver values present consumption more than future consumption. Therefore, the present value of $100 to be received in the future will be less than $100.

If a Saver Has a Positive Rate of Time Preference