Classify Each of the Following in Terms of Their Effect

question 18

Multiple Choice

Classify each of the following in terms of their effect on interest rates (increase or decrease) :
I. Perceived risk of financial securities increases
II. Near term spending needs decrease
III. Future profitability of real investments increases

• A) I increases, II increases, III increases
• B) I increases, II decreases, III decreases
• C) I decreases, II increases, III increases
• D) I decreases, II decreases, III decreases
• E) none of the above

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Definitions:

Variable Manufacturing Overhead

Costs in the production process that vary with the level of output, such as utilities for the machinery.

Specialized Machine Cost

The acquisition and operational costs associated with machinery that is designed for specific, specialized tasks in production.

Direct Labour

Workers who are directly involved in the production of goods or services.

Variable Manufacturing Overhead

Costs that vary directly with the level of production output and can include expenses such as indirect materials and utilities.