If a Bank Has a Positive GAP, a Decrease in Interest

question 33

Multiple Choice

If a bank has a positive GAP, a decrease in interest rates will cause interest income to __________, interest expense to__________, and net interest income to __________.

• A) increase, increase, increase
• B) increase, decrease, increase
• C) increase, increase, decrease
• D) decrease, decrease, decrease
• E) decrease, increase, increase

Describe the principles of conspicuous consumption and the wealth effect.

Evaluate the determinants of consumption and the importance of disposable income in consumer behavior.

Understand the types and implications of different dividends declared by corporations.

Calculate the effect of cash dividends on a company's financial statements.

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Definitions:

Vroom's Normative Model

A psychological theory that describes the ways leaders can decide to engage their team in decision-making processes, based on the situation's complexity and the importance of team agreement.

Shared Information Bias

A tendency in group discussions to focus on information that all members already know, neglecting unique and potentially important information.

Group Polarization

The tendency of group discussion to intensify the preexisting views of members, leading to more extreme positions.

Normative Influence

The impact of societal norms on an individual’s behavior, often leading to conformity in order to be accepted or liked by a group.