Assuming That Other Things Remain the Same, If the Government

question 44

Multiple Choice

Assuming that other things remain the same, if the government increases transfer payments to households, which of the following will most likely happen?

• A)Investment will rise.
• B)The rate of interest will rise.
• C)Public saving will rise.
• D)The market for loanable funds will be unaffected.

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Definitions:

Intra-entity Purchases

Buying and selling of goods or services between departments or divisions within the same company.

Gross Profit Rate

The ratio of gross profit to net sales, indicating the efficiency of a company in managing its production and labor costs.

Intra-entity Transfer

A transaction occurring between divisions or units within the same legal entity.

Noncontrolling Interest

An ownership interest in a corporation that is less than 50%, not allowing for control over the company's operations.