Briefly discuss the relationship between present value and each of the following:a) future valueb) timec) interest rate
What will be an ideal response?
Holding time and interest rate constant, any percentage change in the future value will cause the same percentage change in the present value. Holding the future value and the interest rate constant, and increase in the time until payment reduces the present value and any decrease in time increases the present value. Holding future value and time constant, an increase in the interest rate reduces the present value and a decrease in the interest rate increases the present value.
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Most economists are against rent control, in part, because it:
a. leads to surpluses b. encourages landlords to build too many apartments c. Discourages tenants from searching for apartments d. encourages landlords to overspend in upkeep and maintenance on apartments e. none of the above
An economy in which output has decreased and prices have decreased would suggest a:
A. decrease in short-run aggregate supply. B. increase in aggregate demand. C. increase in short-run aggregate supply. D. decrease in aggregate demand.
Opportunity-cost theory implies that if the public lost most of its interest in spectator sports,
What will be an ideal response?
Assuming money neutrality in the classical model, a 10% increase in the nominal money supply would cause
A. a 10% decrease in the real money supply. B. no change in the real money supply. C. a 10% increase in the real money supply. D. a less-than-10% change in the price level due to a shift in the aggregate supply curve.