Which of the Following Would Be Represented by a Positive

question 10

Multiple Choice

Which of the following would be represented by a positive value of the random supply shock, υ ?
T

• A)an irrational wave of optimism among investors
• B)an increase in government spending
• C)widespread drought leading to large increases in food prices
• D)an increase in the central bank's inflation target

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Definitions:

Compounded Annually

The process wherein the interest earned on an investment is added to the principal at the end of each year, with future interest calculated on the new total.

Treasury Bonds

Long-term government debt securities with a fixed interest rate, considered low-risk investments.

Interest Rate

The amount charged, expressed as a percentage of the principal, by a lender to a borrower for the use of assets.

Compounded Annually

Interest calculation method where the interest is added to the principal sum at the end of each year, affecting the total interest earned or paid.