As the interest rate increases, the present value of a future payment
A) increases.
B) decreases.
C) does not change.
D) approaches infinity.
B
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Consider two scenarios for a nation's economic growth. Scenario A has real GDP growing at an average annual rate of 2%; scenario B has an average annual growth of 4%. The nation's real GDP would double in about
A. 36 years under scenario A, versus 18 years under scenario B. B. 36 years under scenario A, versus 9 years under scenario B. C. 18 years under scenario A, versus 9 years under scenario B. D. 25 years under scenario A, versus 12.5 years under scenario B.
Franco's Frozen Ice produces Italian flavored ice that is sold in the freezer section of grocery stores. Currently, Franco's does not have a fixed advertising budget and advertises in grocery stores' weekly advertising flyers and on the radio. A unit of advertising in the weekly flyers costs $2,000 and a unit of advertising on the radio costs $6,000. At their current advertising levels, the
marginal benefit of advertising in the flyer is $1,500 and the marginal benefit of advertising on the radio is $5,000. Which of the following is true? A) Franco's is currently maximizing its profits from advertising. B) To maximize profits, Franco's should increase the amount of advertising in flyers and on the radio. C) To maximize profits, Franco's should decrease the amount of advertising in flyers and on the radio. D) To maximize profits, Franco's should increase the amount of advertising in flyers, but not change the amount of advertising on the radio.
A fall in the price of capital goods will shift the aggregate:
a. Supply curve leftward b. Demand curve leftward c. Supply curve rightward d. Demand curve rightward
Because demand for air travel from people who are traveling on vacation is ________, the airlines offer leisure travelers lower prices than business travelers.
A. larger B. more elastic C. more inelastic D. smaller