If you are anticipating having to pay $100,000 to a lender 10 years from now and the interest rate falls, the present value of this sum
A. becomes more uncertain.
B. falls.
C. remains unchanged.
D. rises.
Answer: D
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Economists know that a particular good can be classified as an inferior good if a(n) ________ in buyers' income causes a(n) ________ .
A) increase; increase in demand B) increase; increase in quantity demanded C) increase; decrease in demand D) decrease; decrease in demand
A decrease in the demand for soft drinks due to changes in consumer tastes, accompanied by an increase in the supply of soft drinks as a result of reductions in input prices, will result in
A) a decrease in the equilibrium quantity of soft drinks and no change in the equilibrium price. B) a decrease in the equilibrium price of soft drinks and no change in the equilibrium quantity. C) a decrease in the equilibrium price of soft drinks; the equilibrium quantity may increase or decrease. D) an increase in the equilibrium quantity of soft drinks; the equilibrium price may increase or decrease.