Essay: About Time Value of Money
This in turn would assure that the spending of money that is taking place is at an optimum level assuring an efficient allocation of resources. This idea has been reiterated in an article in The New York Times that shows how professors are demanding that a course that would provide instructions on the dealing of financial matters to assure that students learn the ‘time value of money, risk and reward.. and the importance of savings’ should be provided to all students. (Tara Siegel Bernard, New York Times, April 9 2010)
Considering the Economist’s take on the idea of time value of money, it has been noted that despite the recycling concept that was popularized, the savings amounted to little, and thus disclaiming the ‘green(ess)’ of the time value of money with regards to attempts on saving up on expenses by recycling. (Tim Worstall, The Economist May 25th 2007). Therefore Federal Reserve Bank Review article, ‘Zero Nominal Interest Rates: Why They’re Good and How to Get Them.’ Not only addresses those topics but also manages to find sufficient policies to counteract such issues, which have stepped into the limelight ever since the inflation rate has been escalating along with changes in the interest rates, that tends to devalue money over time and has become a major issue and needs to be dealt with before the average real income of the earners starts to fall, leaving them worse off in the future.
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