The Aggregate Demand Curve Slopes Downward Because

question 40

Multiple Choice

The aggregate demand curve slopes downward because

• A)people tend to substitute cheaper goods with more expensive goods.
• B)the SRAS curve is horizontal.
• C)an increase in the price level reduces the aggregate quantity of goods demanded.
• D)the LRAS curve is vertical.

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Definitions:

Yield to Maturity

The total return anticipated on a bond if the bond is held until it matures, including all interest payments and the return of principal.

Treasury Securities

Reiteration of U.S. Treasuries, but emphasizing these are safe, low-risk investment products backed by the full faith and credit of the U.S. government, including Treasury bonds, notes, and bills.

Bond Equivalent Yield

Bond yield calculated on an annual percentage rate method. Differs from effective annual yield.

Quoted Bid Price

The highest price a buyer is willing to pay for a security or commodity at a given moment.