The Present Value and the Interest Rate Have

question 98

Multiple Choice

The present value and the interest rate have:

• A) a direct relationship; as i increases, pv increases.
• B) an inverse relationship; as i increases, pv decreases.
• C) an unclear relationship; whether it is direct or inverse depends on the interest rate.
• D) no relationship.

---

Definitions:

Economic Welfare

The overall well-being and standard of living of individuals and societies, often measured by factors such as income, health, and education.

Economies of Scale

Businesses enjoy cost savings resulting from their size of operations, wherein the cost per unit produced usually drops with greater scale.

Barriers to Entry

Obstacles that make it difficult for new competitors to enter a market, such as high startup costs, access to technology, and strict regulations.

Market Power

The ability of a firm or group of firms to influence or control prices or output in a particular market.