An Increase in the Interest Rate Could Have Been Caused

question 89

Multiple Choice

An increase in the interest rate could have been caused by

• A)a fall in the price level causing the money-demand curve to shift leftward.
• B)a fall in the price level causing the money-demand curve to shift rightward.
• C)a rise in the price level causing the money-demand curve to shift leftward.
• D)a rise in the price level causing the money-demand curve to shift rightward.

---

Definitions:

Internal Rates Of Return

The financial rate that ensures a project's cash flows have a net present value of exactly zero.

Maximum Discount Rate

The highest interest rate set by a central bank to lend money to financial institutions.

Internal Rate Of Return

A metric used in financial analysis to estimate the profitability of potential investments, calculated as the rate of return that makes the net present value of all cash flows equal to zero.

Minimum Discount Rate

The lowest rate at which future cash flows are discounted to determine their present value.