A. increases the present value of future returns from investment and increases investment
B. decreases the present value of future return from investment and decreases investment
C. decreases the present value of future returns from investment and increase investment
D. increases the present value of future returns from investment and decreases investment
Related Mcqs:
- For the United States suppose the annual interest rate on government securities equals 8 percent while the annual inflation rate equals 4 percent, For Switzerland the annual interest rate on government securities equal 10 percent while the annual inflation rate equals 7 percent the above variables would cause investment funds to flow from ?
A. the United States to Switzerland causing the dollar to depreciate
B. the United States to Switzerland causing the dollar to appreciate
C. Switzerland to the United States causing the franc to depreciate
D. Switzerland to the United States causing the franc to appreciate - For the United States suppose the annual interest rate on government securities equals 12 percent while the annual inflation rate equals 8 percent For Japan the annual interest rate on government securities equals 10 percent while the annual inflation rate equals 5 percent the above variables would cause investment funds to flow from ?
A. The United States to Japan causing the dollar to depreciate
B. The United States to Japan causing the dollar to appreciate
C. The Japan to United States, causing the dollar to depreciate
D. The Japan to United States, causing the dollar to appreciate - When money demand is expressed in a graph with the interest rate on the vertical axis and the quantity of money on the horizontal axis an increase in the interest rate ?
A. None of these answers
B. decrease the quantity demanded of money
C. increase the quantity demanded of money
D. decreases the demand for money
E. increases the demand for money - The amount today that would be needed, at prevailing interest rates, to produce a particular sum in the future is known as ?
A. future value
B. fair value
C. present value
D. compound value
E. beginning value - JCB (Which makes agricultural and construction equipment) has the opportunity to purchase a new factory today that will provide them with a Rs50 million return four years from now If prevailing interest rates are 6 percent, what is the maximum that the project can cost for JCB to be willing to undertake the project ?
A. Rs 43,456,838
B. Rs 53,406,002
C. Rs 34,538,902
D. Rs 39,604,682 - If the nominal interest rate is 7 percent and the inflation rate is 3 percent, then the real interest rate is ?
A. 4 percent
B. 10 percent
C. -4 percent
D. 3 percent
E. 21 percent - Keynes liquidity preference theory of the interest rate suggests that the interest rate is determined by ?
A. aggregate supply and aggregate demand
B. the supply and demand for loanable funds
C. the supply and demand for money
D. the supply and demand for labor - If inflation is 8 percent and the real interest rate is 3 percent, then the nominal interest rate must be ?
A. 3/8 percent
B. 5 percent
C. 11 percent
D. 24 percent - Market equilibrium exists when _________ at the prevailing price?
A. quantity demanded equals quantity supplied
B. quantity demanded is less than quantity supplied
C. quantity supplied is greater than quantity demanded
D. quantity demanded is greater than quantity supplied - If consumption when young and when old are both normal goods, an increase in the interest rate ?
A. will always increase the quantity of saving
B. will always decrease the quantity of saving
C. will increase the quantity of saving if the substitution effect outweighs the income effect
D. will increase the quantity of saving if the income effect outweighs the substitution effect
