When Interest Rates Fall in the United States (With the Price

question 12

Multiple Choice

When interest rates fall in the United States (with the price level fixed) ,the value of the dollar ________,domestic goods become ________ expensive,and net exports ________.

• A)falls;less;fall
• B)falls;less;rise
• C)falls;more;fall
• D)rises;less;fall

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Definitions:

Payback Period

The duration of time it takes to recoup the cost of an investment.

Straight-Line Method

A depreciation method that allocates the cost of an asset evenly over its useful life.

Gross Revenues

The total amount of sales revenue generated by a company before any deductions are made for returns, allowances, and discounts.

Payback Method

A capital budgeting method that calculates the time needed to recoup the initial investment in a project, based on the project's expected cash flows.