Econ Sample Test Question

[ItalianFX]

I have an Economics class called "Money and Capital Markets." The class has been a complete disappointment. I feel like it is a finance class all over again, and that is what I left to get into Economics.

We just did a section on bonds and now I have a test tomorrow. Before every test my professor gives us sample problems. We have already completed 2 tests in this class, and with the sample problems of those tests I have found mistakes and let the professor know.

I emailed him about the following question. Please answer truthfully.

[SoloAJ]

C- in Econ at UIUC freshman year tells me I probably guessed wrong.

A in worthless applied economics in high school witha teacher who talked about the White Sox more than economics tells me I might have remembered it from that.

Honestly I probably voted wrong but don't feel that it matters. Mostly because I know the concepts themselves, just not the appropriate name. Ehhhh.

I mean I know that I should take a coupon for a free $1 burger over the $1 for the burger later orwhatever. But eh.

[SoloAJ]

LOL at entirely wrong guesses.

I'm not sure what the point of your poll is though...so I will ask.

Is it to find out how stupid we are about econ concepts? or was I only supposed to answer if I thought I knew the right answer?

[ItalianFX]

I don't know what the results of the poll are, but I want to see if people are answering it the same way I did.

[The4Aces]

i am 95% certian it is present value. I am an econ major if that matters(like you said we dont do alot of this stuff). What did you put and what did ur teacher say.

[SoloAJ]

I just guessed mostly. 50/50ish for me. Having looked up the terms in different words I would change my answer. But I'm not certain that my answer matters. Hah.

[JesseB_11]

I thought it may be present value, but i picked deflation.

[TheDudeAbides]

[ QUOTE ]
i am 95% certian it is present value. I am an econ major if that matters(like you said we dont do alot of this stuff). What did you put and what did ur teacher say.

[/ QUOTE ]

It is definitely present value.

[ItalianFX]

It seems as though the results are in favor of "Present Value," which is what my professor said it was.

I thought it was "Interest," and he said he is "standing by the terminology."

To me, it just seems like the question is worded awkwardly.

[TheDudeAbides]

Hate to say it - but your prof is right.

Interest is the fee paid on borrowed money. But I see where you're coming from.