Which Is the Smallest If the Interest Rate Is 8

question 39

Multiple Choice

Which is the smallest if the interest rate is 8 percent?

• A)$100 to be received after five years
• B)the present value of an annuity of $100 for five years
• C)$100 received in the present
• D)$100 received for two years

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Definitions:

Quantity Theory of Money

A theory stating that the general price level of goods and services is directly proportional to the amount of money in circulation.

M Rises

Refers to an increase in a variable or quantity denoted as "M," which could contextually mean a variety of things depending on the field of study.

Recession

A temporary phase of economic downturn characterized by a decrease in commerce and industrial production, typically recognized by a drop in Gross Domestic Product (GDP) for two consecutive quarters.

Quantity Theorists

Economists who believe that the amount of money in circulation is the primary influencing factor on overall levels of prices and inflation in an economy.