When Prices Increase the Interest Rate Effect

question 65

Multiple Choice

When prices increase the interest rate effect

• A)will increase and the aggregate demand for goods and services will increase.
• B)will increase and the aggregate demand for goods and services will decrease.
• C)will decrease and the aggregate demand for goods and services will decrease.
• D)will not be affected.

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Definitions:

Operating Cycle

The period between the acquisition of inventory and the collection of cash from receivables, indicating the efficiency of a company's operations.

Inventory Period

The duration of time goods remain in inventory before being sold.

Accounts Receivable Period

The accounts receivable period is the average time it takes for a business to receive payments owed by its customers for goods or services sold on credit.

Cash Cycle

This term describes the time it takes for a business to convert its investments in inventory and other resources into cash flows from sales.