Which of the Following Factors Would Be Most Likely to Lead

question 45

Multiple Choice

Which of the following factors would be most likely to lead to an increase in nominal interest rates?

• A) Households reduce their consumption and increase their savings.
• B) A new technology like the Internet has just been introduced,and it increases investment opportunities.
• C) There is a decrease in expected inflation.
• D) The economy falls into a recession.
• E) The Federal Reserve decides to try to stimulate the economy.

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Definitions:

Periodic Inventory

An accounting method where inventory is physically counted at specific intervals to determine the cost of goods sold and ending inventory.

Transactions

The act of buying, selling, or exchanging goods, services, or financial assets in the business world.

Inventory

The total of all goods and materials held by a business for the purpose of resale, production, or use in operations.

Purchases

The acquisition of goods or services for the purpose of resale or use in the production of goods for sale.