The time value of money is based on the belief that people have a positive time preference for consumption.

Question

Quizplus · Accepted Answer

The time value of money is the idea that money can earn interest over time, and it is based on the concept that most people have a preference for consuming goods and services today rather than in the future. This is called a positive time preference for consumption, and it is the basis for understanding why money is worth more now than it is in the future. Therefore, the statement is true.

The Time Value of Money Is Based on the Belief