Which of the Following Will Not Cause an Increase in the Present

question 59

Multiple Choice

Which of the following will not cause an increase in the present value of a sequence of payments?

• A)a reduction in the current interest rate
• B)a reduction in expected future interest rates
• C)an increase in a future expected payment
• D)none of the above

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Definitions:

Behavioral Economists

Specialists who study economic decisions by integrating insights from psychology, judgment, and economics to understand how individuals and institutions make choices.

Alarm Clock

A device used to awaken individuals from sleep at a set time with an alarm.

Myopia

A condition where individuals or organizations focus on short-term gains at the expense of long-term benefits, often leading to suboptimal decisions.

Time Inconsistency

The phenomenon where a person's preferences change over time, such that what is preferred in the future is inconsistent with what is preferred now, often leading to planning and decision-making challenges.