The following figure (Figure 10.4 on your textbook) shows the present value of 1 dollar of climate damages, as a function of the year the damages took place. What can this graph be used to calculate, based on different rates? a.the social cost of carbon b.growth discounting c.inflation d.time discounting 1.03 percent discount rate1 percent discount rate0.80.60.40.20.02000205021002150220022502300Present value ($)

Answered: The following figure (Figure 10.4 on…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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The following figure (Figure 10.4 on your textbook) shows the present value of 1 dollar of climate damages, as a function of the year the damages took place. What can this graph be used to calculate, based on different rates?

	a.	the social cost of carbon
	b.	growth discounting
	c.	inflation
	d.	time discounting

1.0
3 percent discount rate
1 percent discount rate
0.8
0.6
0.4
0.2
0.0
2000
2050
2100
2150
2200
2250
2300
Present value ($)

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