A Decrease in the Price of Spaghetti Is Likely to Cause

question 92

Multiple Choice

A decrease in the price of spaghetti is likely to cause:

• A) a movement to the right along the demand curve for spaghetti.
• B) an inward shift of the demand curve for spaghetti.
• C) an outward shift of the demand curve for spaghetti.
• D) a movement to the left along the demand curve for spaghetti.

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Definitions:

Term To Maturity

The time remaining until a debt instrument, such as a bond or loan, is due to be repaid.

Strip Bond

A debt security that has had its periodic interest payments removed, trading only on the principal amount and offering a final payment at maturity.

Par Value

Par value is the nominal or face value of a bond, share, or coupon as stated by the issuer.

Coupon Payments

Regular interest payments made to bondholders over the life of a bond.