Which One of the Following Will Increase the Present Value

question 48

Multiple Choice

Which one of the following will increase the present value of an annuity, other things equal?

• A)increasing the interest rate
• B)decreasing the interest rate
• C)decreasing the number of payments
• D)decreasing the amount of the payment

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Definitions:

Perfect Price Discriminator

A theoretical entity that charges each consumer the maximum price they would be willing to pay for a good or service.

Perfectly Competitive Firm

A company that operates in a market where buyers and sellers are so numerous and well informed that all elements of monopoly are absent, and the market price of goods is beyond the control of individual buyers and sellers.

Social Loss

Social loss is the total loss to society due to factors like inefficient resource allocation or externalities, which includes both private and external costs.

Cognitive Explanation

An approach that seeks to understand human behavior by exploring internal mental processes such as perception, memory, thought, and problem-solving.