Tightening Monetary Policy Refers to ________

question 72

Multiple Choice

Tightening monetary policy refers to ________.

• A) higher real interest rates
• B) higher nominal interest rates
• C) lower real interest rates
• D) lower nominal interest rates

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Definitions:

Replacement Cost

Cost to replace a firm’s assets. Also called reproduction cost.

Economic Income

The sum of a company's net cash flow and the change in present value of a company's cash flows in a given period.

ROA

Return on Assets, a financial ratio indicating the profitability of a company relative to its total assets.

Capital Structure

The mix of a company's long-term debt, specific short-term debt, common equity, and preferred equity, which is used to finance its overall operations and growth.