A Decision Maker Has D Pesos and Puts This Amount

question 17

Multiple Choice

A decision maker has D pesos and puts this amount in the bank for one year at an interest rate of r percent a year. At the end of one year, the decision maker will have

• A) D(1 + r) pesos
• B) D(1 + r)² pesos
• C) D(1 + r) dollars

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Definitions:

Fed

The Federal Reserve System, the central banking system of the United States, which regulates the U.S. monetary and financial system.

Lender of Last Resort

An institution, usually a country's central bank, that offers loans to banks or other eligible institutions that are facing financial difficulty or are considered highly risky.

Fed

Short for the Federal Reserve System, which is the central banking system of the United States responsible for monetary policy.

Federal Deposit Insurance Corporation

A United States government corporation providing deposit insurance to depositors in U.S. commercial banks and savings institutions.