If the Demand for a Good Increases,it Is Likely That

question 21

Multiple Choice

If the demand for a good increases,it is likely that the demand for the factors of production used as inputs will:

• A)increase.
• B)decrease.
• C)stay the same.
• D)None of these statements is true.

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Definitions:

Discount Rate

The rate of interest that is applied to find out the present value of cash flows predicted in the future, within the framework of discounted cash flow analysis.

Present Value

The monetary valuation presently of a future sum of money or ongoing cash flows, considering a predetermined rate of return.

Interest Rate

The amount charged by a lender to a borrower for the use of assets, expressed as a percentage of the principal, typically on an annual basis.

Discount Rate

Within DCF analysis, it's the rate employed to compute the present economic value of expected future cash inflows.