As Interest Rates Fall, Present Values

question 65

Multiple Choice

As interest rates fall, present values

• A)increase.
• B)decrease.
• C)stay the same.
• D)cannot be determined; need compounding frequency.

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Definitions:

Marginal Revenue

It refers to the additional income earned from selling one more unit of a good or service.

Demand Schedule

A table that lists the quantity of a good or service that consumers are willing to buy at various prices.

Total Revenue Schedule

A table or graph that shows the total revenue a firm can expect to receive at various levels of output, assuming a constant price.

Demand Linear

A relationship in economics where the amount of a good or service demanded changes linearly with its price.