If the Money Wealth, Interest Rate, and International Effects Reduce

question 35

Multiple Choice

If the money wealth, interest rate, and international effects reduce the quantity of aggregate demand by 3 percent when the price rises by 6 percent and the multiplier is 2, then the slope of the aggregate demand curve is:

• A)−1/2.
• B)−1.
• C)−2.
• D)−3.

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Definitions:

Futures Contract

A standardized legal agreement to buy or sell a particular commodity or financial instrument at a predetermined price at a specified time in the future.

Underlying Asset

The financial instrument (e.g., stock, bond, commodity, or currency) on which a derivative instrument, such as an option or futures contract, is based.

Corporate Bond Portfolio

A collection of corporate bonds held by an investor or managed by a financial institution.

T-bond Futures

Financial contracts obligating the buyer to purchase U.S. Treasury bonds at a specified price at a future date, used for hedging and investment purposes.