Use the Following to Answer Questions

question 4

Multiple Choice

Use the following to answer questions
Exhibit: Investment Demand and Aggregate Demand
Figure 14-3
Panel (a)
Panel (b)

-(Exhibit: Investment Demand and Aggregate Demand)
Suppose the interest rate rises from 4.8% to 6% as shown in Panel (a)
And the quantity of investment demanded falls from I_a to I_b.As a result of this, in Panel (b)
,

• A)the aggregate demand curve shifts from AD₁ to AD₂.
• B)the aggregate demand curve shifts from AD₂ to AD₁.
• C)the aggregate demand curve does not shift; there is a movement up along the prevailing aggregate demand curve.
• D)the aggregate demand curve does not shift; there is a movement down along the prevailing aggregate demand curve.

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Definitions:

Secondary Contracts

Agreements that are subsidiary to a primary contract, often detailing additional terms, conditions, or obligations not covered in the main contract.

Collateral Contracts

Collateral contracts are agreements that run parallel to the primary contract, providing additional assurance or terms related to the main contractual agreement.

Express Warranty

A seller's promise or guarantee to a buyer that a product will meet specified quality and performance standards.

Implied Warranties

Refers to unspoken, unwritten guarantees assumed for a product or service under the law.