You Are Scheduled to Receive $10,000 in One Year

question 39

Multiple Choice

You are scheduled to receive $10,000 in one year.An increase in the interest rate will have what effect on the present value of this cash flow?

• A)It will cause the present value to fall.
• B)It will cause the present value to rise.
• C)It will have no effect on the present value.
• D)The effect cannot be determined with the information provided.

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Definitions:

Federal Government Spending

The total expenses incurred by the national government on various services, infrastructure, debt interest, and public welfare programs.

Local Taxes

Taxes imposed by local governments, such as cities or counties, used to fund public services like education, police, and infrastructure.

Social Security Tax

Taxes collected from employees and employers to fund the Social Security program, which provides retirement, disability, and survivor benefits.

Federal Budget

The government’s estimation of revenue and spending for a forthcoming fiscal year that includes allocations of funds to various federal departments and agencies.