Higher interest rates
A)Reflect a higher opportunity cost of money.
B)Raise the present value of future payments.
C)Lower the future value of current dollars.
D)Result in a higher risk premium.

Question

Quizplus · Accepted Answer

Higher interest rates reflect a higher opportunity cost of money, which means that holding onto money becomes more costly. As a result, individuals and businesses may be more incentivized to spend or invest their money rather than hold onto it, leading to an increase in economic activity.

Higher Interest Rates