When Interest Rates Rise

question 5

Multiple Choice

When interest rates rise,

• A) investment increases
• B) investment declines
• C) savings decrease
• D) shortages occur in the market for loans
• E) long run economic growth is encouraged

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Definitions:

Adjusting Entries

Journal entries made at the end of an accounting period to allocate income and expenditures to the appropriate period.

Reversed

Changed to the opposite direction, order, position, or condition, often referring to financial transactions or entries.

Adjusting Entries

Entries made in accounting records at the end of an accounting period to allocate income and expenditure to the period in which they actually occurred.

Reversing Entries

are journal entries made at the beginning of an accounting period to reverse or cancel out adjusting entries from the end of the previous period.