-The Graph Illustrates the Supply of Sweaters

question 12

Multiple Choice

-The graph illustrates the supply of sweaters.A fall in the price of sweaters brings

• A) a movement along the supply curve.
• B) a decrease in the quantity supplied of sweaters.
• C) a shift of the supply curve.
• D) Both answers A and B are correct.
• E) Both answers B and C are correct.

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Definitions:

Futures Contract

A standardized legal agreement to buy or sell something at a predetermined price at a specified time in the future, often used as a financial instrument for hedging or speculation.

Option Contract

A contract which gives the holder the right, but not the obligation, to buy or sell an underlying asset at a specified price within a specified time.

Financial Instruments

Contracts that give rise to both a financial asset of one entity and a financial liability or equity instrument of another entity.

Convertible Note

A financial instrument that can be converted into a specified number of shares of the issuing company at certain times during its life, usually at the discretion of the holder.