Higher interest rates
A. Raise the present value of future payments.
B. Lower the future value of current dollars.
C. Reflect a higher opportunity cost of money.
D. Result in a higher risk premium.
Answer: C
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If the pound-dollar exchange rate changes from £0.60 per dollar to £0.65 per dollar, then the pound has ________ against the dollar and the dollar has ________ against the pound
A) depreciated; depreciated B) appreciated; depreciated C) appreciated; appreciated D) depreciated; appreciated
Within the AD/AS model, if an unanticipated reduction in aggregate demand results in less than the full-employment rate of output,
a. the natural rate of unemployment will increase. b. long-run aggregate supply will increase. c. lower resource prices and declining interest rates will direct the economy back to full employment. d. higher resource prices and rising interest rates will direct the economy back to full employment.
If the cross-price elasticity of demand for two goods is negative, then the two goods are substitutes
a. True b. False Indicate whether the statement is true or false
If U.S. real interest rates fall, international repercussions put _________________ pressure on the price level and __________________ pressure on Real GDP in the United States
A) upward; upward B) upward; downward C) downward; upward D) downward; downward