Which of the Following Statements Best Describes Interest Rates

question 47

Multiple Choice

Which of the following statements best describes interest rates?

• A)The cost of money to fund users is basically determined by the rate of return required by fund providers.
• B)If individuals in general increase the percentage of their income that they save, interest rates are likely to increase.
• C)If companies have fewer good investment opportunities, interest rates are likely to increase.
• D)If expected inflation increases, interest rates are likely to decrease.

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Definitions:

Indirect Method

A method of reporting cash flows from operating activities in the cash flow statement by starting with net income and adjusting for non-cash transactions.

Indirect Method

A technique used in cash flow analysis to adjust net income by changes in non-cash accounts to arrive at cash provided by operating activities.

Accumulated Depreciation

The total amount of depreciation expense that has been recorded for an asset since it was acquired, used to reduce the asset's book value over time.

Intangible Assets

Non-physical assets that provide economic benefits to a company, such as patents, trademarks, goodwill, and copyrights.