When Capacity Utilization Rate Is High

question 51

Multiple Choice

When capacity utilization rate is high:

• A)the price level is likely to go up.
• B)consumption is likely to go down.
• C)investment is likely to increase.
• D)the rate of interest is likely to decrease.
• E)aggregate supply of goods is likely to remain constant.

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Definitions:

Bond Premium

The amount by which the market price of a bond exceeds its face value, often because it offers an interest rate higher than the current market rates.

Callable Bond

A type of bond that gives the issuer the right to repay the bond before its maturity date at a predetermined call price.

Term Bond

A bond that reaches its maturity date at the same time, where the principal amount is due in a lump sum at the end.

Convertible Bond

A type of bond that can be converted into a predetermined amount of the issuer's equity at certain times during its life, usually at the discretion of the bondholder.