Which of the Following Is the Most Appropriate Explanation of a Price

question 84

Multiple Choice

Which of the following is the most appropriate explanation of a price shock?

• A)A large shift in the AD curve
• B)A large shift in the aggregate expenditure line
• C)A shift in potential GDP
• D)A large change in a key commodity price
• E)A shift in the monetary policy rule line

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Definitions:

Modified Duration

A measure that quantifies the sensitivity of the price of a bond or other debt instrument to changes in interest rates, indicating the percentage change in price for a parallel shift in yield curves.

Corporate Bond

A type of debt security issued by corporations to raise capital, promising to pay back the face value plus interest.

Coupon Rate

The interest rate stipulated on a bond’s certificate, paid to its holder at specified intervals until maturity.

Yield To Maturity

The total return anticipated on a bond if it is held until the end of its lifetime, accounting for interest payments and price changes.