Suppose that the rate of interest increases. What will happen to the discounted present value of an investment?
A. It will increase.
B. It will decrease.
C. It will remain unchanged.
D. It depends on the magnitude of the change.
Answer: B
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If the annual inflation rate in an economy is negative, the purchasing power of a dollar:
A) will remain the same over time. B) will increase over time. C) will decrease over time. D) can increase or decrease depending on the nominal interest rate.
The best measure of the standard of living is
A) real GDP per capita. B) real GDP. C) nominal GDP per capita. D) nominal GDP.
Durable and nondurable goods and services lumped together in the expenditure approach to measuring GDP are called:
a. Personal consumption. b. Gross private domestic investment. c. Government spending. d. Inventory. e. Employee compensation.
When the demand curve shifts to the right and supply doesn't change:
A. supply will rise. B. equilibrium quantity will rise. C. equilibrium price will fall. D. quantity demanded will rise.