A Decrease in Sales Expectations May Shift the AD Curve

question 38

Multiple Choice

A decrease in sales expectations may shift the AD curve to the

• A)Left,causing more undesired investment.
• B)Left,causing less undesired investment.
• C)Right,causing more undesired investment.
• D)Right,causing less undesired investment.

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Definitions:

Holding-Period Return

The total return received from holding an asset or portfolio of assets over a period of time, usually expressed as a percentage.

Annual Coupon Rate

An alternative term for Coupon Rate, representing the yearly interest payment made by bonds relative to their face value.

Par Value

The face value of a bond or stock as stated by the issuing company, not necessarily its market value.

Interest Rate Risk

The potential for investment losses that result from a change in interest rates, affecting the value of fixed-income securities inversely to the direction of the rate change.