You Are Scheduled to Receive $10 000 in One Year

question 33

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

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Definitions:

Classical Conditioning

A learning process that pairs a neutral stimulus with a stimulus that naturally produces a response until the neutral stimulus alone produces the same response.

Operant Conditioning

A behavioral modification method in which the level of an action is shaped by giving incentives or imposing deterrents.

Particular Consequence

Specific outcomes or results that follow from a particular action, decision, or event, with implications for those involved.

Reinforcement Theory

A theory that posits behavior is motivated by its consequences, with reinforcement used to either increase desired behaviors or decrease unwanted ones.