When the Interest Rate Changes

question 55

Multiple Choice

When the interest rate changes,

• A)the demand curve for bonds shifts to the right.
• B)the demand curve for bonds shifts to the left.
• C)the supply curve for bonds shifts to the right.
• D)it is because either the demand or the supply curve has shifted.

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Definitions:

Real Prices

Prices that have been adjusted for inflation, reflecting the true purchasing power of money over time.

CPI

The Consumer Price Index (CPI) measures the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services.

Producer Price Index

An economic indicator that measures the average change over time in the selling prices received by domestic producers for their output.

Wholesale Price Changes

Alterations in the prices at which goods are sold in bulk, typically from manufacturers to retailers before reaching consumers.