Which of the Following Would Normally Be Expected to Result

question 26

Multiple Choice

Which of the following would normally be expected to result in an increase in the supply of funds,all else equal?
I. The perceived riskiness of all investments decreases.
II. Expected inflation increases.
III. Current income and wealth levels increase.
IV. Near term spending needs of households increase as energy costs rise.

• A)I and III only
• B)II and III only
• C)II,III,and IV only
• D)I and IV only
• E)I,II,III,and IV

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Definitions:

Operating Activities

Cash flows directly related to the production and delivery of a company's goods and services.

Direct Method

A method of reporting the cash flows from operating activities as the difference between the operating cash receipts and the operating cash payments.

Indirect Method

A method of reporting the cash flows from operating activities as the net income from operations adjusted for all deferrals of past cash receipts and payments and all accruals of expected future cash receipts and payments.

Cash Equivalents

Short-term, highly liquid investments that are readily convertible to known amounts of cash and are subject to an insignificant risk of changes in value.