Question

QUESTION 10 What is the elasticity of the marginal utility of consumption? O A measure of future uncertainty O A measure of how much richer people value extra consumption A measure of the social discount rate O A measure of present value consumption

Answer 1

ANSWER : A MEASURE OF THE SOCIAL DISCOUNT RATE

The policy profile of both distributional welfare weights and the social discount rate has risen considerably in recent years. This fact has important implications for the allocation of funds to social projects and policies in countries, and in unions of countries such as the EU. A key component in the formulae for both welfare weights and the social discount rate is the elasticity of marginal utility of consumption,

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