A Higher Interest Rate ___________ and __________

question 21

Multiple Choice

A higher interest rate ___________ and __________.

• A)reduces the present value of future income;reduces today's consumption
• B)increases the present value of future income;increasing today's consumption
• C)increases the discount rate;increases today's consumption
• D)is an incentive to borrow more today;reduces future consumption
• E)reduces inflation;consumers spend more today.

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Definitions:

Charge

A fee or price asked for goods and services, or an accounting entry reflecting a debt or liability.

Variable Factory Overhead

Expenses in a factory operation that vary with production volume, such as utilities or raw materials.