Which of the Following Statements About the Result of a Deterioration

question 32

Multiple Choice

Which of the following statements about the result of a deterioration in business conditions that also causes a decrease in a nation's wealth is false?

• A) The impact on bond prices will be ambiguous since both the bond demand and supply curves shift left.
• B) The price of bonds will increase if bond supply decreases more than bond demand.
• C) Interest rates will increase if bond demand decreases more than bond supply.
• D) Neither bond demand nor bond supply will shift.

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Definitions:

Accrued Interest

The interest that has been earned but not yet paid, accumulating on loans, bonds, or any other financial instruments over a period of time.

Notes Receivable

Financial assets representing amounts owed to a company by debtors, typically evidenced by formal instruments with specified payment terms.

Factoring Fee

A charge assessed for the service of factoring, where a business sells its receivables to a third party at a discount.

Accounts Receivable

The money owed to a business by its customers for goods or services delivered or used but not yet paid for, considered a current asset on the balance sheet.