For every dollar's worth of goods and services bought today, the amount of money it will take in N years to buy the same amount of goods and services when the average future inflation rate is p^eis called the______ .

Question

Quizplus · Accepted Answer

The concept described in the question is that of future inflation, meaning that the inflation rate is expected to change in the future. The term "discount factor" refers to the present value of future cash flows, which in this case represents the current value of money necessary to buy the same amount of goods and services in N years. Therefore, the correct term for this measure is the future inflation discount factor. Option A is incorrect as there is no mention of realized inflation, option C is incorrect as "future-augmented inflation factor" is not a commonly used term, and option D is also incorrect as there is no mention of adjusting for past inflation rates.

For Every Dollar's Worth of Goods and Services Bought Today