Use the Following to Answer Questions

question 123

Multiple Choice

Use the following to answer questions .
Exhibit: The Bond Market
-(Exhibit: The Bond Market) Suppose the Fed takes action that shifts the demand curve from S to S′, as illustrated in Panel (b) . As a result, the interest rate

• A) increases and investment increases.
• B) increases and investment decreases.
• C) decreases and investment increases.
• D) decreases and investment decreases.

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Definitions:

Marginal Utility

The additional satisfaction or utility received by consuming one more unit of a good or service.

Total Utility

The total satisfaction received from consuming a given total quantity of a good or service.

Marginal Utility

The additional satisfaction or benefit received by consuming one more unit of a good or service.

Consumer Demand Curve

illustrates the relationship between the price of a good or service and the quantity demanded by consumers over a period, typically showing an inverse relationship.