Changes in Which of the Two Factors Below Would Most

question 41

Multiple Choice

Changes in which of the two factors below would most likely cause a change in consumer spending? The following list of factors, are related to the aggregate demand curve.Real-balances effect
Household expectations
Interest-rate effect
Personal income tax rates
Profit expectations
National income abroad
Government spending
Foreign trade effect
Exchange rates
Degree of excess capacity

• A)1 and 3
• B)2 and 4
• C)5 and 10
• D)8 and 9

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Definitions:

Compounded Quarterly

A method in which interest is added to the principal sum of a deposit or loan every three months, leading to interest on interest.

Compounded Monthly

Interest on an investment or loan that is calculated and added to the principal balance once a month, leading to faster growth.

Semi-Annually Compounded

A rephrasing of "compounded semi-annually," where interest is calculated twice a year on the initial principal and previously accumulated interest.

Nominal Rate

The interest rate stated on a financial product or agreement without adjusting for inflation or compounding interest effects.