Suppose That a New Bond Rating Service Is Established That

question 78

Multiple Choice

Suppose that a new bond rating service is established that specializes in rating municipal bonds that had not previously been rated. The likely result would be

• A)a shift to the right in the demand curve for bonds.
• B)a shift to the left in the supply curve for loanable funds.
• C)an increase in the equilibrium interest rate.
• D)a decrease in the equilibrium interest rate.

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Definitions:

Labor Productivity

A measure of economic performance that calculates the output produced per hour of labor.

Supply Shock

An unexpected event that suddenly changes the supply of a product or commodity, leading to swift price changes and potentially impacting an economy.

Short-Run Aggregate Supply Curve

A curve showing the relationship between the total supply of goods and services and the price level for output in the short run.

Energy Prices

The cost of consumable energy sources, such as oil, natural gas, coal, and electricity, which can fluctuate based on market demand, supply conditions, geopolitical events, and other factors.