Which of the Following Events Could Explain an Increase in Interest

question 167

Multiple Choice

Which of the following events could explain an increase in interest rates together with an increase in investment?

• A)The government runs a larger deficit.
• B)The government institutes an investment tax credit.
• C)The government replaces the income tax with a consumption tax.
• D)None of the above is correct.

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Definitions:

Ordinary General Annuity

A sequence of uniform payments made at consistent intervals, where interest is calculated and added at each period's conclusion.

Present Value

Present Value is a financial concept that represents the current worth of an amount that is to be received in the future, discounted to reflect the time value of money and interest rates.

Accurate To The Cent

Describes a level of precision in financial calculations or measurements that are exact to the smallest denomination of currency, such as a cent in the U.S. dollar.

Periodic Interest Rate

The rate of interest charged on a loan or earned by an investment for a duration that is less than one year.