Figure 14.2 -Refer to Figure 14.2. a Movement from Point B to B

question 90

Multiple Choice

Figure 14.2
-Refer to Figure 14.2. A movement from point b to point c could be caused by a simultaneous ________ and ________.

• A) increase in the money supply; increase in the price of oil
• B) decrease in taxes; decrease in the price of oil
• C) increase in taxes; decrease in government spending
• D) increase in the price of oil; massive crop failure

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Definitions:

Interest Expense

The cost incurred by an entity for borrowed funds over a period, shown as an expense in the income statement.

Bank Loan Payable

A liability account that records the amount owed to a bank by the borrower, to be paid back with interest.

Maturity

The date on which a financial instrument, such as a bond or loan, is due to be repaid in full.

Operating Line of Credit

A flexible loan from a bank that provides a maximum loan balance that the borrower can access for its short-term capital needs.