Assume That Investment Does Not Depend on the Interest Rate

question 42

Multiple Choice

Assume that investment does not depend on the interest rate.A reduction in government spending will cause which of the following for this economy?

• A)no change in the interest rate
• B)no change in output
• C)no change in investment
• D)an increase in investment
• E) none of the above

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Definitions:

Adjusted Trial Balance

A list of all accounts and their balances after adjustments are made for accruals, deferrals, and errors, ensuring the total debits equal the total credits.

Accounting Period

The period of time covered by financial statements, usually consisting of 12 months, but can be of any length according to the business's reporting requirements.

Ledger

A book or collection of financial accounts where transactions are recorded.

GAAP

Generally Accepted Accounting Principles, a set of accounting standards and procedures used in the preparation of financial statements in the U.S.