Suppose the Nominal Interest Rate Is Zero

question 74

Multiple Choice

Suppose the nominal interest rate is zero.In this situation,the present discounted value of a finite sequence of future payments is equal to which of the following?

• A)zero
• B)the sum of the all payments divided by the rate of inflation
• C)the average value of each payment
• D)the sum of all payments
• E) the square of the sum of all payments

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Definitions:

Withdrawal Reflex

An involuntary reaction to a painful or harmful stimulus that results in the quick retraction of the body part exposed to the danger, providing a protective mechanism.

Stretch Reflex

A muscle contraction in response to stretching within the muscle, designed to maintain muscle tone and posture.

Golgi Tendon Reflex

A reflex that protects tendons and muscles from excessive tension by causing muscle relaxation when force is too great, preventing damage.

Reciprocal Innervation

A neuromuscular phenomenon in which the contraction of one muscle is accompanied by the relaxation of its antagonist muscle.