As the Interest Rate Increases,the Present Value of a Future

question 54

Multiple Choice

As the interest rate increases,the present value of a future payment

• A) increases.
• B) decreases.
• C) does not change.
• D) approaches infinity.

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Definitions:

Leisure

Free time available to an individual after all work or economic activities have been completed, often used for rest, recreation, or other personal activities.

Utility Function

A mathematical representation of how consumer preferences over bundles of goods or services translate into levels of satisfaction or utility.

Leisure

Time free from the demands of work or duty, where individuals may choose to engage in activities for relaxation, enjoyment, or other personal satisfaction.

Consumption

The use of goods and services by households, referring to the action and effect of consuming products.