Which of the Following Is FALSE

question 7

Multiple Choice

Which of the following is FALSE?

• A)in the short run, the rate of monetary growth and the rate of inflation always follow the same pattern
• B)in the short run, a change in the growth rate of money can affect the level of output
• C)in the short run, factors other than an increase in the growth rate of money can cause inflation to increase
• D)in the long run, a sustained increase in the growth rate of money will cause the inflation rate to increase
• E)in the long run, a sustained increase in the growth rate of money will have no effect on the level of output

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Definitions:

Borrowed Funds Cost

The cost associated with borrowing money, including interest payments and any other fees.

Tax Rate

The tax rate applicable to the income earned by individuals or corporations.

Straight-Line Depreciation

A method of calculating the depreciation of an asset by evenly spreading the cost over its expected useful life.

Depreciation Tax Shield

A deduction that reduces taxable income due to the depreciation of assets, thereby lowering one's tax liability.