An Increase in the Reserve Supply

question 181

Multiple Choice

An increase in the reserve supply

• A)will result in inflation if the unemployment rate is high.
• B)causes interest rates to rise.
• C)shifts the aggregate demand curve inward.
• D)will probably cause inflation if the economy is at potential GDP.

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Definitions:

Prepaid Rent

Prepaid rent refers to rent payments made in advance for a specified period, which is recorded as an asset on the balance sheet until it is consumed or the rental period passes.

Rent Expense

A periodic payment made by a tenant to occupy property or use equipment, recorded as an expense on the income statement.

Adjusting Entry

Entries made in the accounting records at the end of an accounting period to allocate income and expenditures to the period in which they actually occurred.

Accumulated Depreciation

The cumulative amount of depreciation expense recorded for an asset from the time it was purchased and deployed for use.