You are expecting to receive $750 at some time in the future. Which of the following would unambiguously decrease the present value of this future payment?
a. Interest rates rise and you get the payment sooner.
b. Interest rates rise and you have to wait longer for the payment.
c. Interest rates fall and you get the payment sooner.
d. Interest rates fall and you have to wait longer to get the payment.
b
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In the foreign exchange market, how does the quantity of U.S. dollars demanded respond to a change in the U.S. exchange rate? Why is there this response?
What will be an ideal response?
Sally Jones lost her job at a steel company because of a permanent decline in the demand for steel. Sally Jones is considered by economists to be
A) naturally unemployed. B) cyclically unemployed. C) structurally unemployed. D) frictionally unemployed.
Investment decisions are based on the trade-off between the:
A. potential profit that could be generated by investment and the cost of borrowing money to finance the investment. B. interest rate that savers will earn and the interest rate that the borrowers will have to pay. C. future value of the loan and the present value of the loan. D. potential profit that could be generated and the willingness of a lender to make the loan.
If the economy is operating at full employment and there is a substantial increase in the money supply, the quantity theory of money predicts an increase in
(a) the velocity of money (b) real output (c) interest rates (d) unemployment (e) the price level