If Total Spending Is Greater Than the Value of Output

question 81

Multiple Choice

If total spending is greater than the value of output, firms will

• A)cut prices.
• B)decrease production levels.
• C)tend to raise prices.
• D)see inventories rise.

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Definitions:

Discount on Bonds Payable

This term refers to the difference between a bond's face value and its selling price when the bond is sold for less than its face value.

Contract Rate

The agreed-upon interest rate specified in a contract, particularly relevant in loans and financing agreements.

Market Rate

The current price or interest rate at which goods, services, or securities are bought and sold in a competitive marketplace.

Bond Selling Price

The market price at which a bond is traded, which may be above (premium) or below (discount) its face value.