« previous next »

Author Question: What happens to the present value of 1 one year from now if the market rate of interest falls? ... (Read 70 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?

The Romans did not use numerals to indicate fractions but instead used words to indicate parts of a whole.

Did you know?

Fewer than 10% of babies are born on their exact due dates, 50% are born within 1 week of the due date, and 90% are born within 2 weeks of the date.

Did you know?

Acetaminophen (Tylenol) in overdose can seriously damage the liver. It should never be taken by people who use alcohol heavily; it can result in severe liver damage and even a condition requiring a liver transplant.

Did you know?

The word drug comes from the Dutch word droog (meaning "dry"). For centuries, most drugs came from dried plants, hence the name.

Did you know?

Medications that are definitely not safe to take when breastfeeding include radioactive drugs, antimetabolites, some cancer (chemotherapy) agents, bromocriptine, ergotamine, methotrexate, and cyclosporine.

Maximal Heart Rate Over Time Maximal Heart Rate Over Time
Effects of Elevation on Heart Rate and Ventilation Effects of Elevation on Heart Rate and Ventilation
Respiratory Rate Ranges of Various Age Groups Respiratory Rate Ranges of Various Age Groups
During my research in India, I interviewed this 8-year-old girl. Mahashury is a bonded laborer who ... During my research in India, I interviewed this 8-year-old girl. Mahashury is a bonded laborer who ...
Determining the order and rate constant of an irreversible first-order reaction Determining the order and rate constant of an irreversible first-order reaction
The rate of replacement of a recessive allele d by the dominant allele D by mutation alone. Even tho The rate of replacement of a recessive allele d by the dominant allele D by mutation alone. Even tho
Video: Cardiac Cycle (Part 4 of 4)

For a complete list of videos, visit our video library