The rate of exchange between future consumption and current consumption is
A) The nominal risk-free rate.
B) The coefficient of investment exchange.
C) The pure rate of interest.
D) The consumption/investment paradigm.
E) The expected rate of return.

Question

Quizplus · Accepted Answer

The rate of exchange between future consumption and current consumption is known as the pure rate of interest. It represents the compensation required by savers to delay their consumption or the premium that borrowers pay to obtain resources to consume or invest earlier.

The Rate of Exchange Between Future Consumption and Current Consumption