If Interest Rates Increase, Business Investment Expenditures Are Likely to ________

question 92

Multiple Choice

If interest rates increase, business investment expenditures are likely to ________ and consumer durable expenditures are likely to ________.

• A) increase; increase
• B) increase; decrease
• C) decrease; increase
• D) decrease; decrease

---

Definitions:

Current Liability

A company's debt or obligation that is due within one year or within the normal operating cycle, whichever is longer.

Cumulative Preferred Shares

A type of preferred stock where dividends accumulate if not paid in a given year and must be paid out before any dividends can go to common stockholders.

Contributed Surplus

The excess amount paid by investors over the par value of shares, recorded in the shareholders' equity section of the balance sheet.

Retained Earnings

The amount of net earnings not distributed to shareholders as dividends but reinvested in the business or kept as reserves.