Which of the Following Is an Example of the Interest-Rate

question 16

Multiple Choice

Which of the following is an example of the interest-rate effect,assuming the U.S.price level decreases?

• A) The purchasing power of money decreases and people buy more goods
• B) U.S.goods are more expensive for foreigners to buy and exports decrease
• C) U.S.production costs increase and producers charge higher prices
• D) The demand for loans decreases so interest rates decline and loan-financed purchases increase

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Definitions:

Patent

An exclusive right to sell or produce one’s discovery or invention. A patent is good for 20 years.

Copyright

The exclusive right that is granted by the federal government to sell and reproduce literary, musical, or artistic works for a period of time.

Plant Asset

Long-term tangible assets that are used in the operations of a business and are not intended for sale, such as machinery, buildings, and equipment.

Machine Account

An account used in bookkeeping to track the costs and depreciation of a company's machinery.