The higher the interest rates
a. the more value individuals place on future dollars
b. the more value individuals place on current dollars
c. individuals do not place any importance on either current or future dollars
d. does not affect the investment strategy
b
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The bonus of a plant manager in a vertically integrated firm is based on the following formula:
Bonus = 10,000 - 0.5(Qf - Q) where Qf is feasible production and Q is actual production. The value for Qf is provided by the plant manager at the beginning of the year. With this scheme, the plant manager has an incentive: A) to underestimate Qf. B) to overestimate Qf. C) to reveal the true Qf and make Q as small as possible. D) to reveal the true Qf and make Q as large as possible.
All of the following are true, except
a. Some consumers may infer high prices of a good to signal high quality b. Low prices can also signal high quality c. Promotional campaigns do not affect consumer's perception on quality d. It makes more sense to raise price when advertising makes demand less elastic
Which of following statements about bonds is NOT true?
A. Bonds have a variable term. B. The face value of a bond is the amount to be paid at maturity. C. The maturity of a bond refers to the period over which payments are made. D. When interest rates rise, the present discounted value of a bond falls.
An increase in confidence will cause
A. AS to decrease (move up and to the left). B. AD to decrease (move to the left). C. AS to increase (move down and to the right). D. AD to increase (move to the right).