-Refer to the Figure Above

question 68

Multiple Choice

-Refer to the figure above. Which of the following could have caused the shift in the demand curve?

• A)an increase in the price of a substitute for Good Z
• B)a decrease in the expected future price of Good Z
• C)a decrease in the price of Good Z
• D)an increase in income if Good Z is an inferior good

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Definitions:

Zero-coupon Bonds

Bonds that do not pay periodic interest and are sold at a discount from their face value; the return comes from the difference between the purchase price and the face value paid at maturity.

Yield To Maturity

The total return expected on a bond if it is held until the date it matures, including all interest payments and the repayment of the principal.

Annual Interest

The amount of money earned or paid on an investment or loan over a one-year period, expressed as a percentage of the principal.