The Table Below Shows Data for Five Economies of Similar

question 113

Multiple Choice

The table below shows data for five economies of similar size.Real GDP is measured in billions of dollars.Assume that potential output for each economy is $340 billion. TABLE 24-1 Refer to Table 24-1.Consider Economy E.Which of the following best describes the positions of the aggregate demand and aggregate supply curves in this economy?

• A)The AD curve has shifted to the right and the economy is in a short-run disequilibrium position.
• B)The AS curve has shifted to the left and the economy is in a short-run disequilibrium position.
• C)The intersection of the AD and AS curves is to the right of Y*.
• D)The intersection of the AD and AS curves is to the left of Y*.
• E)The intersection of the AD and AS curves coincide with the long-run aggregate supply curve.

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Definitions:

Public Offering Price

The price at which new issues of stocks or bonds are offered to the public by an issuer for the first time.

Spread

The difference between two prices or rates, such as the bid and ask price of a stock, or the interest rates of two different investments.

Yield to Maturity

The total return anticipated on a bond if the bond is held until it matures, including both interest payments and capital gains.

Bond Indenture

A legal and binding contract between a bond issuer and the bondholders, specifying the terms of the bond such as the interest rate, maturity date, and other conditions.