Suppose a Country Had a Smaller Increase in Debt in 2011

question 2

Multiple Choice

Suppose a country had a smaller increase in debt in 2011 than it had in 2010.Then other things the same,we would expect

• A)lower interest rates and investment in 2011 than in 2010.
• B)lower interest rates and greater investment in 2011 than in 2010.
• C)higher interest rates and greater investment in 2011 than in 2010.
• D)higher interest rates and lower investment in 2011 than in 2010.

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Definitions:

Financial Statements

Formal records of the financial activities and position of a business, person, or other entity, typically including the balance sheet, income statement, and cash flow statement.

Current Ratio

A financial metric that evaluates a firm's capacity to meet its short-term liabilities using its existing assets.

Industry Average

The mean performance metric, such as revenue growth or return on equity, of the companies in a particular industry or sector.

Receivables

Money owed to a business by its customers for goods or services that have been delivered but not yet paid for.