Which of the Following Statements Is Correct

question 3

Multiple Choice

Which of the following statements is correct?

• A) Interest would not exist in a nonmonetary economy.
• B) The present value of a future dollar payment is inversely related to both the interest rate and to how far in the future the payment will be received.
• C) A "positive rate of time preference" means that an individual would rather save than consume.
• D) During an extended inflationary period, the money (or nominal) interest rate will usually be lower than the real rate of interest.

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Definitions:

Crop Insurance

A policy that protects agricultural producers against crop loss or damage caused by weather, pests, or disease.

Freedom to Farm Act

U.S. legislation passed in 1996 that aimed to reduce government control over farming operations and subsidies, allowing farmers more freedom to make planting decisions.

Special-Interest Effect

The situation where a small group gains substantially at the expense of a large group, often seen in political lobbying and policy making.

Farm Legislation

Laws and regulations specifically enacted to govern agricultural practices, support farmers, and regulate food production.