- Based on the Figure Above, the Aggregate Demand Curve Will

question 67

Multiple Choice

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Based on the figure above, the aggregate demand curve will shift from AD0 to AD1 when

• A)the Federal Reserve lowers the interest rate.
• B)government expenditure decreases.
• C)the price level rises.
• D)potential GDP increases.
• E)the price level falls.

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Definitions:

Over-The-Counter Market

A decentralized market, without a central physical location, where participants trade securities directly between two parties.

New York Stock Exchange

A leading global securities exchange where stocks, bonds, and other financial instruments are bought and sold, based in New York City.

Call Option

An agreement in finance that allows the purchaser the option, but not the duty, to acquire a stock, bond, commodity, or different asset at an agreed-upon price within a predetermined timeframe.

Risk-Free Interest Rate

The return on an investment that is guaranteed, with no risk of financial loss, typically associated with the most secure government bonds.