« previous next »

Author Question: What happens to the present value of 1 one year from now if the market rate of interest falls? ... (Read 68 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?

Autoimmune diseases occur when the immune system destroys its own healthy tissues. When this occurs, white blood cells cannot distinguish between pathogens and normal cells.

Did you know?

Though methadone is often used to treat dependency on other opioids, the drug itself can be abused. Crushing or snorting methadone can achieve the opiate "rush" desired by addicts. Improper use such as these can lead to a dangerous dependency on methadone. This drug now accounts for nearly one-third of opioid-related deaths.

Did you know?

Stroke kills people from all ethnic backgrounds, but the people at highest risk for fatal strokes are: black men, black women, Asian men, white men, and white women.

Did you know?

Dogs have been used in studies to detect various cancers in human subjects. They have been trained to sniff breath samples from humans that were collected by having them breathe into special tubes. These people included 55 lung cancer patients, 31 breast cancer patients, and 83 cancer-free patients. The dogs detected 54 of the 55 lung cancer patients as having cancer, detected 28 of the 31 breast cancer patients, and gave only three false-positive results (detecting cancer in people who didn't have it).

Did you know?

People with high total cholesterol have about two times the risk for heart disease as people with ideal levels.

The Black Death spread over much of Europe in a three-year period in the middle of the fourteenth ce The Black Death spread over much of Europe in a three-year period in the middle of the fourteenth ce
Preoperative photograph of a 43-year-old Caucasian male with necrotizing fasciitis on the day of ... Preoperative photograph of a 43-year-old Caucasian male with necrotizing fasciitis on the day of ...
Portrait of Typical 12-year-old Boy and Girl, 1981 and 2007-2009 Portrait of Typical 12-year-old Boy and Girl, 1981 and 2007-2009
Research that has examined babies' ability to recognize themselves develops in the 2 year Research that has examined babies' ability to recognize themselves develops in the 2 year
Calculating Growth Rate of Bacteria Calculating Growth Rate of Bacteria
A promissory note has a face value of $6000 and it has a date of issue of June 1 this year. The ... A promissory note has a face value of $6000 and it has a date of issue of June 1 this year. The ...
Video: Magnetic resonance imaging (MRI)

For a complete list of videos, visit our video library