Define the discount rate. tell who can raise the discount rate. explain how raising the discount rate leads to a reduction in the money supply.

Discount rates are used to determine today's value of money paid or received at some future time.

This calculation is used in the cost-benefit analysis in order to place all economic flows of a project that occur at different points in time into a single year currency so that costs and benefits can be compared.

The rates used are typically around 10%, but try to analyze them with other rates between 5% and 15% to determine if the viability of the project is sensitive to the discount rate. It is  defined by World Bank or the government of the country concerned.

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the earthquake in haiti was a magnitude of 7.0 according to the u.s geological survey yet the smaller earthquake in haiti killed more than 200,000 and left more than 1.2 million people homeless. the chile earthquake was a magnitude of 8.8 and 500 times more stronger but chile's earthquake only injured 712 people.