The Leftward Shift of the AD Curve During 2007 Occurred

question 1

Multiple Choice

The leftward shift of the AD curve during 2007 occurred partly because of

• A)higher net exports.
• B)a balanced federal government budget.
• C)an increase in consumer confidence.
• D)a stock market crash.
• E)the Fed lowering interest rates.

---

Definitions:

Coupon Rate

The annual interest rate paid by a bond expressed as a percentage of the bond's face value.

YTM

Yield to Maturity, the total return anticipated on a bond if held until it matures.

Premium Bonds

Bonds sold for more than their face value due to offering interest rates higher than the current market average.

Discount Bonds

Bonds that are sold for less than their face value, typically reflecting that the market interest rates are higher than the bond's coupon rate.