Which of the Following Is True

question 141

Multiple Choice

Which of the following is true?

• A) As interest rates increase, present values increase.
• B) Pure economic rent is a payment to a monopolist for the monopolist's product.
• C) Ricardo argued that land rent is price determined, not price determining.
• D) The present value of $10,000 in one year, at a 6 percent interest rate, is $9,200.
• E) none of the above

---

Definitions:

Crowding-Out Effect

Describes a situation in economics where increased public sector spending reduces or eliminates private sector spending, often due to higher interest rates or borrowed funds.

Private Saving

The portion of individual or household income that is not spent on consumption but saved for future use.

Private Investment

The expenditure by businesses on capital goods, such as machinery and buildings, and changes in inventories.

Crowding-Out Effect

A situation where increased government spending leads to a reduction in private sector investment.