When People Expect Higher Inflation, Usually Nominal Interest Rates Will

question 134

Multiple Choice

When people expect higher inflation, usually nominal interest rates will:

• A)fall.
• B)rise.
• C)remain unchanged.
• D)move erratically.

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Definitions:

Accumulated Depreciation

The total amount of a tangible fixed asset's cost that has been charged to expense through depreciation over its useful life.

Carrying Amount

The net value of an asset or liability according to a company’s financial statements, calculated as the original cost minus any depreciation, amortization, or impairment costs.

Supplies Account

An account used to track the cost of supplies consumed during a period or the supplies on hand at the end of a period.

Adjusting Entry

A journal entry made at the end of an accounting period to update the ledger for revenues and expenses that have been earned or incurred but not yet recorded.