Suppose There Is an Increase in Cash Flow

question 42

Multiple Choice

Suppose there is an increase in cash flow. This suggests that:

• A) the real interest rate has increased.
• B) the rate of depreciation has increased.
• C) current profits have increased.
• D) firms have decreased their expectations of future profits.
• E) All of the above.

Recognize the effects of economic perceptions and uncertainties on investment spending and aggregate demand.

Identify causes and effects of fluctuations in real GDP.

Analyze the impact of technological progress and expectations on price levels and production.

Understand the relationship between aggregate supply, aggregate demand, and economic equilibrium.

---

Definitions:

Protestant Reformation

A religious movement in the 16th century that led to the creation of Protestant Christianity, challenging the authority and practices of the Catholic Church.

King Henry VIII

The Tudor king of England (reigned 1509–1547) known for his six marriages and the English Reformation, leading to the separation of the Church of England from papal authority.

Act of Supremacy

Legislation passed in 1534 that declared the monarch of England to be the supreme head of the Church of England, separating it from the authority of the Pope and the Roman Catholic Church.

Salvation

In spiritual beliefs, Christians believe that being saved from sin and its penalties is achieved through faith in Christ.