A positive gap implies that an increase in interest rates will cause _______ in net interest income.
A)no change
B)a decrease
C)an increase
D)an unpredictable change

Question

Quizplus · Accepted Answer

A positive gap means that the amount of interest-earning assets is greater than liabilities and a rise in interest rates will increase the net interest income. Therefore, an increase in interest rates will cause an increase in net interest income.

A Positive Gap Implies That an Increase in Interest Rates