Increases in Investment Spending Cause Interest Rates to Increase

question 53

Multiple Choice

Increases in investment spending cause interest rates to increase.As a result,

• A) households will demand more loanable funds
• B) households will save a smaller fraction of their incomes
• C) households will voluntarily decrease their consumption spending
• D) the investment curve will shift leftward
• E) firm will receive greater profits from households who are consuming goods

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Definitions:

Unused Supplies

Supplies that have been purchased but not yet used in the operation of a business.

Prepaid Insurance

An asset account on the balance sheet that represents a payment made for insurance services that have not yet been received or used up within the period of the insurance contract.

Accrued Fees

Fees that have been incurred but not yet paid or recorded by the entity.

Adjusting Entry

A journal entry made at the end of an accounting period to allocate income and expenditures to the period in which they actually occurred.