-Use the Figure Above to Answer This Question

question 4

Multiple Choice

-Use the figure above to answer this question. At a price level of 90

• A) people will be forced to cut consumption so that aggregate demand will decrease.
• B) the aggregate quantity demanded exceeds real GDP and inventories will decrease.
• C) inventories increase and firms will increase production.
• D) the aggregate quantity demanded exceeds real GDP, inventories increase and the price level will rise.

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Definitions:

Face Value

The nominal or original value printed on a security or financial instrument, such as a bond or stock certificate, indicating its worth at issuance.

Coupon Rate

The yearly interest yield on a bond, shown as a percentage of its nominal value, disbursed from the date of issuance to the date it matures.

Present Value

A calculation that determines the current value of an amount of money to be received in the future, discounted at a specific interest rate.

Yield To Maturity

Yield to maturity is the total return expected on a bond if the bond is held until it matures, including all interest payments and the repayment of par value.