Other Factors Constant, the Future Value Will Be Smaller

question 200

Multiple Choice

Other factors constant, the future value will be smaller,

• A) the larger is its present value.
• B) the higher is the interest rate.
• C) the shorter is the time period t.
• D) the larger is the number of periods.

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Definitions:

Consumer Surplus

The difference between the total amount that consumers are willing and able to pay for a good or service versus the total amount that they actually do pay.

Producer Surplus

The difference between the amount producers are willing to accept for a good or service versus how much they actually receive, measured by the area above the supply curve and below the market price.

Government Tax

is a compulsory financial charge imposed by a government on individuals, organizations, or transactions to fund public expenditure.

Consumer Surplus

The difference between what consumers are willing to pay for a good or service relative to its market price, representing the benefit to consumers from participating in the market.