An Increase in the Prevailing Interest Rate

question 38

Multiple Choice

An increase in the prevailing interest rate

• A) increases the present value of future returns from investment, and increases investment.
• B) decreases the present value of future returns from investment, and decreases investment.
• C) decreases the present value of future returns from investment, and increases investment.
• D) increases the present value of future returns from investment, and decreases investment.

---

Definitions:

Price Increases

Situations where the cost of goods or services rise, often reflecting inflation or increased production costs.

Cancer-Causing Particles

Substances or elements that, upon exposure, increase the risk of developing cancer in living tissues.

Plastic Containers

Durable and versatile containers made from plastic materials used for storing, packaging, or transporting goods.

Demand Decrease

A situation in which the quantity of a good or service sought by buyers falls due to factors such as changes in taste, income, or prices of substitutes.