The concept of present value helps explain why
a. investment decreases when the interest rate increases, and it also helps explain why the quantity of loanable funds demanded decreases when the interest rate increases.
b. investment decreases when the interest rate increases, but it is of no help in explaining why the quantity of loanable funds demanded decreases when the interest rate increases.
c. the quantity of loanable funds demanded decreases when the interest rate increases, but it is of no help in explaining why investment decreases when the interest rate increases.
d. None of the above are correct; the concept of present value is of no help in explaining why either investment or the quantity of loanable funds demanded decreases when the interest rate increases.
a
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The total value of the goods and services produced over a period of time represents an economy’s
a. planned savings. b. total income. c. total wealth. d. capital.
Estimates by economists of the natural rate of unemployment in the U.S. economy in the early 2000s run at about
a. 3.5% to 4.5%. b. 4.5% to 5.5%. c. 5.5% to 6.5%. d. 6.5% to 7.5%.
At the equilibrium point in a perfectly competitive industry, the total surplus (the sum of the consumer surplus and producer surplus) will be at its maximum
a. True b. False Indicate whether the statement is true or false
Suppose there is proposed legislation that would subsidize the domestic commercial aircraft manufacturing industry in the U.S., to be funded with a new 1 percent national sales tax. Which of the following categories best fits this proposed legislation?
a. Traditional public goods legislation b. Special-interest legislation c. Competing-interest legislation d. Populist legislation