Figure 10-1 ​

question 113

Multiple Choice

Figure 10-1
​
-If the price level in Figure 10-1 were 100,

• A)firms would have to lower their prices.
• B)inventories would be accumulating.
• C)shortages of goods would exist.
• D)aggregate quantity demanded would exceed aggregate quantity supplied.
• E)both c and d would occur.

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Definitions:

Commercial Paper

An unsecured, short-term debt instrument issued by corporations.

Treasury Bills

Short-term government securities issued at a discount from their face value, maturing in a year or less.

Low Default Risk

A classification for bonds or other forms of debt that are deemed to have a minimal chance of the issuer failing to make the required payments.

Money Market

The money market is a segment of the financial market in which financial instruments with high liquidity and very short maturities are traded, intended for short-term borrowing and lending.