If the Inflation Rate Increases

question 79

Multiple Choice

If the inflation rate increases,

• A)real GDP growth increases.
• B)the real interest rate rises.
• C)potential GDP increases.
• D)the velocity of circulation increases.
• E)the nominal interest rate falls.

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Definitions:

EBIT

Earnings Before Interest and Taxes captures a business's earning power by including all costs except those related to interest and taxes.

Times Interest Earned

A metric that measures a company's ability to meet its debt obligations by comparing its income before interest and taxes to its interest expenses.

Current Assets

Resources anticipated to be exchanged for cash, disposed of, or utilized within a twelve-month period or over the usual duration of the company's operational cycle, if that period extends beyond a year.

Current Liabilities

Short-term financial obligations due within one year, including debts and accounts payable.