Paying the Principal on a Note Plus Interest Would

question 3

Multiple Choice

Paying the principal on a note plus interest would:

• A) increase total liabilities.
• B) decrease total assets.
• C) increase owner's equity.
• D) B and C could be correct.

---

Definitions:

Short Run

A period of time in which at least one input, typically capital, is fixed, and producers can only adjust the variable inputs like labor.

Long Run

A period in economics during which all inputs and operations can be varied, allowing for the adjustment to changes in market conditions or demand.

Very Long Run

In microeconomics, a period of time long enough that technology can change and firms can introduce new products.