An Increase in the Expected Price Level Shifts Short-Run Aggregate

question 3

Multiple Choice

An increase in the expected price level shifts short-run aggregate supply to the

• A)right,and an increase in the actual price level shifts short-run aggregate supply to the right.
• B)right,and an increase in the actual price level does not shift short-run aggregate supply.
• C)left,and an increase in the actual price level shifts short-run aggregate supply to the left.
• D)left,and an increase in the actual price level does not shift short-run aggregate supply.

---

Definitions:

Coupon Rate

The annual interest rate paid by a bond's issuer to its bondholders, usually expressed as a percentage of the face value.

Face Value

The nominal or dollar value printed on a stock, bond, or other financial instrument, representing its legal value.

Maturity

The date on which the principal amount of a financial instrument, such as a bond or loan, is to be paid back in full.

Current Yield

The annual income (interest or dividends) divided by the current price of the security, often used to compare the return on investment of different securities.