Which of the Following Best Describes the Consequences of an Increase

question 122

Multiple Choice

Which of the following best describes the consequences of an increase in the bank rate?

• A)Banks will borrow more from Bank of Canada so reserves increase.
• B)Banks will borrow more from Bank of Canada so reserves decrease.
• C)Banks will borrow less from Bank of Canada so reserves increase.
• D)Banks will borrow less from Bank of Canada so reserves decrease.

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Definitions:

Net Capital Spending

The total spending on new capital assets minus the sales of disposed or obsolete assets.

OCF

Operating Cash Flow, which represents the cash generated by a company's normal business operations.

Net Working Capital

The gap between a firm's short-term assets and liabilities, reflecting its immediate financial condition.

Cash Flow

The all-encompassing total of fund transactions in and out of a business, essentially shaping its liquid financial state.