An Increase in Interest Rates

question 79

Multiple Choice

An increase in interest rates

• A)increases the value of the dollar,net exports,and equilibrium output.
• B)increases the value of the dollar,reducing net exports and equilibrium output.
• C)reduces the value of the dollar,net exports,and equilibrium output.
• D)reduces the value of the dollar,increasing net exports and equilibrium output.

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Definitions:

Double-Declining-Balance

A method of accelerated depreciation that doubles the normal depreciation rate, allowing more depreciation in the earlier years of an asset’s life.

Depreciation Expense

The portion of an asset's cost allocated over its useful life to account for its decline in value over time.

Useful Life

The duration over which an asset is expected to be economically viable and useful to the owner.

Depreciation Expense

The systematic allocation of an asset's cost over its useful life, reflecting the consumption or wear and tear of the asset.