Which of the Following Will Increase Future Value Relative to Present

question 2

Multiple Choice

Which of the following will increase future value relative to present value?

• A) A higher interest rate
• B) A shorter period
• C) More safety
• D) Less risk

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Definitions:

Economies of Scale

Cost advantages reaped by companies when production becomes efficient, as the cost per unit of output decreases with increasing scale.

Specialization of Labor

An economic strategy where individuals or groups focus on producing a limited range of goods or services to increase efficiency and output.

Marginal Cost

The expense involved in creating one more unit of a product or service.

Constant Returns to Scale

A situation in which output increases by the same proportion as inputs when the scale of production is changed.