Deflation

question 4

Multiple Choice

Deflation

• A)increases incomes and enhances the ability of debtors to pay off their debts.
• B)increases incomes and reduces the ability of debtors to pay off their debts.
• C)decreases incomes and enhances the ability of debtors to pay off their debts.
• D)decreases incomes and reduces the ability of debtors to pay off their debts.

---

Definitions:

Net Present Value

A financial metric that evaluates the profitability of an investment or project by calculating the difference between the current value of all cash inflows and outflows over time.

Future Income

Prospective earnings or revenue that an individual or entity expects to receive.

Interest Rate

The fee imposed by a creditor on a debtor for the utilization of resources, stated as a proportion of the principal amount.

Net Present Value

A financial metric used to assess the value of an investment by calculating the present value of expected future cash flows minus the initial investment cost.