Which of the Following Changes Would Increase the Present Value

question 35

Multiple Choice

Which of the following changes would increase the present value of a future payment?

• A)an increase in the size of the payment
• B)an increase in the time until the payment is made
• C)an increase in the interest rate
• D)All of the above are correct.

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Definitions:

Indifference Curves

Graphical representations that show combinations of two goods among which a consumer is indifferent, meaning each combination gives the consumer the same satisfaction or utility.

Budget Constraints

The limitations on the consumption bundles that a consumer can afford, given their income and the prices of goods and services.

Relative Prices

The price of one good or service compared to another, usually expressed as a ratio.

Price of Good

The amount of money required to purchase a specific product or service.