An Increase in Future Value Can Be Caused by an Increase

question 21

Multiple Choice

An increase in future value can be caused by an increase in the:

• A)annual interest rate.
• B)number of compounding periods.
• C)original amount invested.
• D)both A and B.
• E)all of the above.

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Definitions:

Property Rights

Legal rights and claims governing the use, transfer, and disposal of property, which can apply to both tangible and intangible assets.

Market Failure

A situation where the free market fails to allocate resources efficiently, leading to a net social welfare loss.

Private Goods

Goods that are excludable and rival in consumption, meaning their use is limited to paying customers and one person's use of the good prevents another's use of it.

Prices

The sum of money needed to buy a product or service.