Reference no: EM133116040

1.) Why do people have a time preference regarding money? Using examples from your own life, explain why someone would benefit from having money now rather than money later.

2.) What does future value mean. If it helps, explain a situation in your own life in which you would benefit from knowing the future value of some amount of money you have. In your discussion, explain the components of the future value equation, FV=PV (1+i)n, and explain how each component affects the outcome of the equation.

3.) What does present value mean. If it helps, talk about one of your future dreams. What is the present value of it? Explain in terms of your own dreams the components of the present value equation-PV=FV[1/(1+i)n]-and explain how each component might affect your ability to achieve a certain dream.

4.) State the difficult choices that government leaders face in solving our long-term budget problems.

5.) Why does scarcity mean that people must choose?

6.) Why choices involve opportunity costs?

7.) How is a family budget an exercise in managing scarcity? What role does income play?

8.) Why is it tempting to think that credit cards, and other forms of credit, negate scarcity?