If Inflation Falls

question 17

Multiple Choice

If inflation falls,

• A)people choose to put in more effort to keep money balances low.When inflation is unexpectedly low it redistributes wealth from lenders to borrowers.
• B)people choose to put in more effort to keep money balances low.When inflation is unexpectedly low it redistributes wealth from borrowers to lenders.
• C)people choose to put in less effort to keep money balances low.When inflation is unexpectedly low it redistributes wealth from lenders to borrowers.
• D)people choose to put in less effort to keep money balances low.When inflation is unexpectedly low it redistributes wealth from borrowers to lenders.

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Definitions:

Indirect Method

In cash flow statement preparation, refers to starting with net income and adjusting for non-cash transactions to calculate operating cash flow.

Accounts Payable

Liabilities of a business that represent amounts owed to creditors for goods and services received but not yet paid for.

Accrued Liabilities

Liabilities recognized on the balance sheet before a company receives the related goods or services.

Indirect Method

A cash flow statement preparation approach that adjusts net income for changes in non-cash items to arrive at operating cash flow.