Figure 11-5 -Refer to Figure 11-5. If the Economy Is at Point

question 96

Multiple Choice

Figure 11-5
-Refer to Figure 11-5. If the economy is at point b, the Federal Reserve can close the output gap by selling bonds. In the bond market,

• A) the supply curve shifts right, leading to a decrease in bond prices and an increase in interest rates.
• B) the demand curve shifts right, leading to an increase in bond prices and a decrease in interest rates.
• C) the supply curve shifts left, leading to an increase in bond prices and an increase in interest rates.
• D) the demand curve shifts left, leading to a decrease in bond prices and an increase in interest rates.

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Definitions:

Certification Process

The formal procedure by which an individual or organization is assessed and confirmed to meet specific standards or qualifications.

Resistance Point

In negotiation, the least favorable point at which one will accept a deal. Beyond this point, the party would prefer to walk away from negotiations.

Bargaining Committee

A group of individuals, often from a labor union, designated to negotiate terms of employment, such as wages and working conditions, with an employer.

Hourly Wage

The amount of money paid to an employee for each hour of work performed.