Figure 13.3 Panel (A) Panel (B)

question 65

Multiple Choice

Figure 13.3

Panel (a) Panel (b)
-Refer to Figure 13.3.If exchange rates are floating,an expansionary fiscal policy and the typical central bank response to the change in inflation caused by the fiscal policy would best be represented by a movement from ________ in panel (a) and a corresponding movement from ________ in panel (b) .

• A) point A to point D; point X to point Y
• B) point C to point B; point X to point Y
• C) point D to point A; point Y to point X
• D) point B to point C; point Y to point X

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Definitions:

Mutual Funds

Investment vehicles made up of a pool of funds collected from many investors for the purpose of investing in securities such as stocks, bonds, money market instruments, and other assets.

Pension Funds

Investment pools that pay for workers' retirements. Contributions are made by employers, employees, or both, and the funds are invested on the employees' behalf.

Secondary Market Transaction

The buying and selling of existing financial securities among investors or traders, which occurs after the initial issuance of the securities.

Issuing Corporation

The company or entity that releases or sells securities, such as stocks or bonds, to raise capital.