A Fall in the Price Level Causes

question 12

Multiple Choice

A fall in the price level causes

• A)the LM curve to shift downward.
• B)the LM curve to shift upward.
• C)movement up along an LM curve.
• D)movement down along an LM curve.

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Definitions:

Real Option Valuation

A technique in finance that calculates the value of future investment decisions, including the choices and flexibility in business projects.

Real Options

The value of additional decision-making opportunities available to a business when investing, likened to financial options.

Cash Flow

The amount of cash and cash equivalents being transferred into and out of a business, indicating its liquidity position.

Net Present Value

Net present value (NPV) is the calculation used to find today’s value of a future stream of payments and earnings, accounting for the time value of money.