Suppose That Investment Rises and Interest Rates Fall

question 141

Multiple Choice

Suppose that investment rises and interest rates fall. Which of the following best explains these changes?

• A)The government went from surplus to deficit.
• B)The government instituted an investment tax credit.
• C)The government reduced the tax rate on savings.
• D)The government repealed an investment tax credit.

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Definitions:

Pension Expense

The cost recognized by a company for the benefits provided to employees in retirement pension plans.

Fully Funded Pension Rights

Retirement plan benefits that have been completely backed by financial contributions, ensuring that sufficient assets are available to meet future obligations.

Pension Expense

The total amount an employer is obligated to contribute to an employee's defined benefit pension plan in a given period.

Partially Funded Pension Rights

Pension schemes where not all of the future pension obligations are covered by current assets and contributions, implying that some liability remains unfunded.