If interest rates are ________, one dollar today is worth more than one dollar one year from now.
A) positive
B) negative
C) zero
D) all of the above are correct

Question

Quizplus · Accepted Answer

When interest rates are positive, it means that you can earn interest on your money, making it worth more in the future. Therefore, one dollar today is worth more than one dollar one year from now. When interest rates are negative, you would lose money by keeping it, making one dollar today worth less than one dollar in the future. When interest rates are zero, there is no change in value over time, so one dollar today is worth the same as one dollar in the future.

If Interest Rates Are ________, One Dollar Today Is Worth