Other Things the Same,as the Real Interest Rate Falls

question 128

Multiple Choice

Other things the same,as the real interest rate falls

• A)domestic investment and net capital outflow both rise.
• B)domestic investment and net capital outflow both fall.
• C)domestic investment rises and net capital outflow falls.
• D)domestic investment falls and net capital outflow rises.

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Definitions:

FICA-Medicare Tax

The portion of the Federal Insurance Contributions Act tax that funds Medicare, deducted from employees' wages and also paid by employers.

Federal Income Tax

The tax levied by the IRS on the annual earnings of individuals, corporations, trusts, and other legal entities.

Withholdings

The portion of an employee's earnings that is deducted and sent directly to the government by the employer for tax purposes.

Salaries Expense

The total amount paid to employees in salary form over a specified accounting period, considered an operating expense.