In the Long Run, a Rightward Shift of the FE

question 26

Multiple Choice

In the long run, a rightward shift of the FE line will result in

• A)the LM curve shifting down and to the right.
• B)the IS curve shifting up and to the left.
• C)an increase in the real interest rate.
• D)an increase in the price level.

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Definitions:

With Recourse

A term indicating that if the primary party defaults on an obligation, the lender or third party has the right to seek repayment from the signer of the instrument.

Factoring Without Recourse

A financial transaction where a business sells its invoices to a third party without the obligation of repurchase if the invoices go unpaid.

Bad Receivables

Amounts owed to a company that are unlikely to be paid by the debtor, often due to financial difficulty.

Troubled Debt Restructuring

A process where terms of an existing debt are modified due to the debtor's inability to pay, often resulting in reduced interest rates or extended payment terms.