Higher Savings Usually Requires Higher Interest Rates Because

question 115

Multiple Choice

Higher savings usually requires higher interest rates because:

• A) everyone prefers to save more instead of consuming.
• B) saving requires sacrifice and people must be compensated for this sacrifice.
• C) higher savings means we expect interest rates to decrease.
• D) of the rule of 72.

---

Definitions:

Statement of Cash Flows

A financial statement that shows how changes in balance sheet accounts and income affect cash and cash equivalents, breaking the analysis down to operating, investing, and financing activities.

Non-Current Liabilities

Liabilities not due for settlement within 12 months after the reporting period, often including long-term loans, bonds payable, and lease obligations.

Profit After Tax

The net income earned by a company after all taxes have been deducted from total revenue.

Depreciation Expense

The allocation of the cost of a tangible asset over its useful life, reflecting the decrease in value due to use and age.