If You Hold the Annual Percentage Rate Constant While Increasing

question 65

Multiple Choice

If you hold the annual percentage rate constant while increasing the number of compounding periods per year,then

• A) the effective interest rate will increase.
• B) the effective interest rate will decrease.
• C) the effective interest rate will not change.
• D) none of the above.

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Definitions:

Common Resource

A resource like air or water that is non-excludable and rivalrous, meaning it's difficult to prevent anyone from using it, and one person's use diminishes others' use.

Common Resource

A resource like air or water that is not owned by anyone, but can be used freely by the public, often leading to overuse and depletion.

Socially Optimal

A condition or point at which the benefit to society is maximized, often considered in economic contexts to represent the most efficient allocation of resources.

Cost-Benefit Analysis

An estimate of the costs and benefits of providing a good. When governments use cost-benefit analysis, they estimate the social costs and social benefits of providing a public good.