d. $90 20. The term \"positive rate of time preference\" means: a. consumers pre

Question

d. $90 20. The term "positive rate of time preference" means: a. consumers prefer earlier consumption to later consumption. b. consumers will demand a greater quantity of loanable funds as the interest rate rises. c. people prefer more time to do something than less time. d. All of the above. 21. A decrease in expected rates of return would lead to: a. a decrease in the demand for loanable funds. b. a decrease in the equilibrium interest rate. c. a decrease in the quantity of borrowing. d. All of the above. If the nominal interest rate is 9% and the rate of inflation is 5%, the real interest rate is: a. 4% b. 5% c. 9% d. 14% 22.-- 23 The present value of $1,000 to be received two years from today, assuming a 5% interest rate, is: a. $873.44 b. $900.00 c. $907.03 d. $1,100.00

Explanation / Answer

20. a - Consumer prefer an earlier consumption to later consumption.

21. a

24. c

25. a

26. c

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