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Suppose the Economy Is in Long-Run Equilibrium When the Price

question 27

Multiple Choice

Suppose the economy is in long-run equilibrium when the price of oil rises. Which one of the following is not a short-run effect of this situation?


Definitions:

9-Year Duration

A metric indicating the sensitivity of a bond's price to changes in interest rates, represented here as the bond having an average response over a nine-year period.

Default Risks

The likelihood that a borrower will fail to meet the obligations of paying back a loan or interest payments.

Conversion Ratios

A specific figure or ratio that determines how convertible securities, like convertible bonds, can be exchanged for other types of securities, typically the common stock of a company.

Maturities

The dates on which financial obligations or instruments are due to be paid back or expire.

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