Consider the Long-Run Theory of Investment,saving and Growth

question 90

Multiple Choice

Consider the long-run theory of investment,saving and growth.For a given level of national income,a decrease in private consumption or government purchases will cause the equilibrium interest rate to

• A)increase and the flow of national saving to fall.
• B)increase and the flow of investment to increase.
• C)increase and the flow of investment to decrease.
• D)decrease and the flow of investment to decrease.
• E)decrease and the flow of investment to increase.

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Definitions:

Wages Payable

A liability account that records the amounts owed to employees for work that has been performed but not yet paid.

Biweekly Salaries

Compensation paid to employees on a two-week basis, typically resulting in 26 pay periods per year.

Fiscal Period

A specific time frame, such as a month, quarter, or year, used for financial accounting and reporting purposes.

Salary Expense

The total expense incurred by a company to compensate its employees on a salaried basis during a specific period.