An increase in short-term interest rates will increase the carrying costs of the firm.

Name: An increase in short-term interest rates will increase the carrying costs of the firm.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

When short-term interest rates increase, it becomes more expensive for companies to borrow money, which increases their carrying costs (the costs of holding inventory, accounts receivable, etc.). Therefore, the statement is true.

An Increase in Short-Term Interest Rates Will Increase the Carrying