What Happens When the Cost of Acquiring Funds from the Bank

question 132

Multiple Choice

What happens when the cost of acquiring funds from the Bank of Canada is low?

• A) Banks raise the interest rates they charge their customers.
• B) Fewer businesses and individuals are willing to take out loans.
• C) The economy slows and inflation is reduced.
• D) Interest rates on bank loans tend to fall.

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Definitions:

Financial Statements

These are formal records of the financial activities and condition of a business, person, or other entity, typically including the balance sheet, income statement, and cash flow statement.

Adjusted Trial Balance

A statement that lists all the account titles and balances of a company after making necessary adjustments but before the preparation of financial statements.

Unearned Revenue

Money received by a business for goods or services yet to be provided; classified as a liability until the service or product is delivered.

Adjusting Entry

An accounting journal entry made at the end of an accounting period to record any unrecorded income or expenses for that period.