Which of the Following Is Not an Economic Cost of Higher

question 73

Multiple Choice

Which of the following is not an economic cost of higher than anticipated inflation?

• A)Purchasing power of people on fixed incomes will fall.
• B)A person who has borrowed money at a fixed interest rate will be disadvantaged.
• C)Businesses incur costs through having to change prices.
• D)Banks who have loaned out money at a fixed interest rate will be disadvantaged.

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Definitions:

Net Income

The total profit of a company after all expenses and taxes have been deducted from total revenues.

Interest Expense

The cost incurred by an entity for borrowed funds; interest expense is a non-operating cost shown on the income statement.

Current Ratio

A financial metric assessing a firm's capability to meet its short-term liabilities or debts due within a year.

Financial Information

Data related to the financial status and performance of an entity, including assets, liabilities, revenues, and expenses.