In January, the interest rate is 5 percent and firms borrow $50 billion per month for investment projects. In February, the federal government doubles its monthly borrowing from $25 billion to $50 billion. That drives the interest rate up to 7 percent. As a result, firms cut back their borrowing to only $30 billion per month.
a. There is a crowding-out effect of $20 billion.
b. There is a crowding-out effect of $25 billion.
c. There is no crowding-out effect because both the government and firms are still borrowing a lot.
d. There is no crowding-out effect because the government’s increase in borrowing exceeds firms' decrease in borrowing.

Reynolds corp. factors $400,000 of accounts receivable with mateer finance corporation on a without recourse basis on july 1, 2015. the receivables records are transferred to mateer finance, which will receive the collections. mateer finance assesses a finance charge of 1 ½ percent of the amount of accounts receivable and retains an amount equal to 4% of accounts receivable to cover sales discounts, returns, and allowances. the transaction is to be recorded as a sale.required: a. prepare the journal entry on july 1, 2015, for reynolds corp. to record the sale of receivables without recourse.b. prepare the journal entry on july 1, 2015, for mateer finance corporation to record the purchase of receivables without recourse— think through this.c. explain the difference between sale of receivables with recourse as oppose to without recourse.