Which of the Following Changes Would Decrease the Present Value

question 16

Multiple Choice

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

• A)a decrease 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:

Expansionary policy

Economic policies aimed at increasing the supply of money or reducing taxation to stimulate economic growth, typically undertaken during a recession.

Contractionary Policy

Economic policies intended to reduce spending and slow down inflation, often through increased interest rates or reduced government spending.

Banking System

The network of institutions, including commercial banks, central banks, and other financial intermediaries, that provide banking services and facilitate financial transactions within an economy.

U.S. Government Securities

Financial instruments issued by the United States Department of the Treasury to fund federal government spending, including Treasury bonds, notes, and bills.