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If a Bank Has a Negative GAP, an Increase in Interest

question 15

Multiple Choice

If a bank has a negative GAP, an increase in interest rates will cause interest income to __________, interest expense to__________, and net interest income to __________.


Definitions:

Variable Costing

A costing method that only includes variable production costs—costs that change with the level of output—in product pricing.

Unsold Units

Inventory items that have not been sold during a specific period, representing stock still available for sale.

Absorption Costing

A cost calculation approach encompassing all production expenses, such as direct materials, direct labor, along with both variable and fixed overhead costs, in determining the price of a product.

Unsold Units

Inventory items that have not been sold during a specific period, representing potential revenue that has not been realized.

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