As the interest rate rises, the present value of a given perpetual stream of income

A) increases.
B) decreases.
C) does not change.
D) approaches infinity.


B

Economics

You might also like to view...

Which of the following is NOT an advantage of a futures contract over a forward contract?

A) reduced counterparty risk B) increased flexibility C) lower information cost D) increased liquidity

Economics

Water supply problems are widespread, indicating that

a. water markets can seldom work, because water Is a necessity. b. property rights are frequently incomplete and not fully tradable. c. water is too important to ration by price. d. water markets are seldom controlled by government.

Economics

It is because firms consciously try to balance social costs and benefits that efficiency conditions of perfect competition come about.

Answer the following statement true (T) or false (F)

Economics

A decrease in aggregate demand could be caused by

A. A decrease in the value of the domestic currency. B. A booming economy. C. Expansionary monetary policy. D. Contractionary monetary policy.

Economics