Which of the Following Is an Effect of an Increase

question 50

Multiple Choice

Which of the following is an effect of an increase in the interest rate?

• A) People put more money in their savings accounts.
• B) Foreign citizens decide to buy fewer Canadian bonds.
• C) Firms decide to purchase new machinery.
• D) People decide to increase residential investment.

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Definitions:

Dividend Yield

A fiscal ratio indicating the annual dividends a company dispenses in relation to its stock price.

Tax Effects

The impact of tax laws on the financial performance of a company or the net income of an individual, including deductions, exemptions, and liabilities.

Stock Splits

An initiative taken by a company to multiply its current shares into more shares to augment the ease of trading those shares.

Owner's Equity

Owner's equity represents the owner's claim on the assets of a business after all liabilities have been deducted, indicating the net value owned by the proprietor in the company.