Which of the Following Factors Would Be Most Likely to Lead

question 30

Multiple Choice

Which of the following factors would be most likely to lead to an increase in interest rates in the economy?

• A) Households reduce their consumption and increase their savings.
• B) The Federal Reserve decides to try to stimulate the economy.
• C) There is a decrease in expected inflation.
• D) The economy falls into a recession.
• E) Most businesses decide to modernize and expand their manufacturing capacity,and to install new equipment to reduce labor costs.

---

Definitions:

Book Value

The net value of a company's assets as recorded on the balance sheet, calculated as total assets minus intangible assets and liabilities.

Markup Percentage

It is a percentage added to the cost of a product to determine the selling price, reflecting the profit margin the seller aims to achieve.

Product Cost Method

An accounting method used to assign costs to inventory and cost of goods sold, including direct materials, direct labor, and manufacturing overhead.

Differential Cost

The difference in total cost between two alternatives in making a business decision.