When the Interest Rate in the U

question 261

Multiple Choice

When the interest rate in the U.S. decreases as a result of expansionary monetary policy, investment spending _____ and consumption _____ .

• A)increases; increases
• B)increases; decreases
• C)decreases; increases
• D)decreases; decreases

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Definitions:

Net Operating Income

The total profit of a company after operating expenses are subtracted from operating revenues, excluding non-operating income and expenses.

Contribution Margin Ratio

The percentage of each sales dollar that contributes toward covering fixed costs and generating profit.

Fixed Monthly Expenses

Recurring expenses that do not change in amount from month to month, such as rent, salaries, and insurance premiums.

Net Operating Income

Income from operations after deducting operating expenses but before interest and taxes.