An Increase in the Real Interest Rate Will Cause an Increase

question 28

Multiple Choice

An increase in the real interest rate will cause an increase in ________.

• A)saving
• B)planned investment
• C)net exports
• D)all of the above
• E)none of the above

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Definitions:

Repair Expense

Costs incurred to fix or maintain property or equipment, generally deductible in the year they are incurred for tax purposes.

IRC Section 179

Allows taxpayers to deduct the cost of certain property as an expense when the property is placed in service (rephrased definition for §179 Expense).

Depreciated

The reduction in the recorded cost of an asset in accounting, reflecting wear and tear, age, or obsolescence.

Ordinary Expense

An expense that is common, accepted, necessary, and appropriate for a business or individual's trade or profession under tax law.