An Increase in the Real Interest Rate, All Other Things

question 19

Multiple Choice

An increase in the real interest rate, all other things held constant, will cause a country's ________ to ________.

• A) current consumption: increase
• B) current consumption: decrease
• C) terms of trade; improve
• D) terms of trade; worsen
• E) welfare level; improve

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Definitions:

Trial Balance

A bookkeeping worksheet in which the balances of all ledgers are compiled into debit and credit account columns that are equal.

Chart of Accounts

A structured list of all the financial accounts in an organization's general ledger, categorized by short and long-term liabilities, assets, revenue, and expenses.

Income Statement

A financial report that shows a company's revenues, expenses, and net income over a specific period of time.

Trial Balance

An accounting report that lists the balances of all ledgers accounts to verify that the total debits equal the total credits, used for internal purposes to check for errors.