« previous next »

Author Question: What happens to the present value of 1 one year from now if the market rate of interest falls? ... (Read 43 times)

Frost2351

  • Hero Member
  • *****
  • Posts: 557
on: Jun 29, 2018
What happens to the present value of 1 one year from now if the market rate of interest falls? Explain.
 
  What will be an ideal response?

Question 2

Contractionary monetary policy to prevent real GDP from rising above potential real GDP would cause the inflation rate to be ________ and real GDP to be ________.
 
  A) higher; higher B) higher; lower C) lower; lower D) lower; higher


durant1234

  • Sr. Member
  • ****
  • Posts: 338
Reply #1 on: Jun 29, 2018
Answer to Question 1

If the interest rate falls, the present value of 1 one year from now will increase. If the interest rate is lower, the amount you would have to set aside today to end up with 1 one year from now would be higher.

Answer to Question 2

C


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
« previous next »
 

Did you know?

People with alcoholism are at a much greater risk of malnutrition than are other people and usually exhibit low levels of most vitamins (especially folic acid). This is because alcohol often takes the place of 50% of their daily intake of calories, with little nutritional value contained in it.

Did you know?

People about to have surgery must tell their health care providers about all supplements they take.

Did you know?

Illness; diuretics; laxative abuse; hot weather; exercise; sweating; caffeine; alcoholic beverages; starvation diets; inadequate carbohydrate consumption; and diets high in protein, salt, or fiber can cause people to become dehydrated.

Did you know?

No drugs are available to relieve parathyroid disease. Parathyroid disease is caused by a parathyroid tumor, and it needs to be removed by surgery.

Did you know?

In Eastern Europe and Russia, interferon is administered intranasally in varied doses for the common cold and influenza. It is claimed that this treatment can lower the risk of infection by as much as 60–70%.

Maximal Heart Rate Over Time Maximal Heart Rate Over Time
Overfished per year Overfished per year
Fertility, Mortality, and the Net Rate of Reproduction in Sweden Fertility, Mortality, and the Net Rate of Reproduction in Sweden
If a graph has the following x-intercepts, which value of x is the instantaneous rate of change ... If a graph has the following x-intercepts, which value of x is the instantaneous rate of change ...
Present Value Formula: Amortization Schedule Present Value Formula: Amortization Schedule
Calculate the amount of interest that will be charged on $9000.00 borrowed for four months at ... Calculate the amount of interest that will be charged on $9000.00 borrowed for four months at ...
Video: Dissociative Disorders (Part 3)

For a complete list of videos, visit our video library