Fare 2700

In class we discussed two key indicators that are used in the selection of discount rates for present value calculations. One indicator is the 'social rate of time 'preference', which is the measure of a society's willingness to pay to postpone private consumption. Another is the 'social opportunity cost of capital', which is the marginal earnin'g rate for private business investment. Which one of the following statements is true? 0 The 'social rate of time preference' should be constant across regions or countries. ' O The 'social opportunity cost of capital' is the upper bound estimate of the socia discount rate. Q The \"social opportunity cost of capital' represents the personal saving account rate. ' O The 'social rate of time preference' is the upper bound estimate of the social discount rate