Figure 10-8 -Refer to Figure 10-8. If the Economy Is at Point

question 35

Multiple Choice

Figure 10-8
-Refer to Figure 10-8. 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:

Cumulative Binomial Probabilities

The sum of the probabilities of obtaining all outcomes up to a specified point in a binomial distribution.

Random Variable

A variable whose values are outcomes of a random phenomenon.

Accurate

The degree to which the result of a measurement, calculation, or specification conforms to the correct value or a standard.

Contribution

An addition or support provided to something, often referring to the role or impact one element brings to an overall outcome or project.