Figure 8-2 -Refer to Figure 8-2.Which of the Following Would a Shift

question 102

Multiple Choice

Figure 8-2

-Refer to Figure 8-2.Which of the following would a shift in aggregate demand from AD₀ to AD₂ illustrate?

• A)an increase in investment, combined with an increase in imports
• B)the discovery of new, profitable, technological investment opportunities, combined with inventory levels that have fallen below desired levels
• C)a reduction in business expectations, combined with the imposition of new tariffs by major trading partners
• D)faster growth rates by a major trading partner, combined with an increase in stock market wealth

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Definitions:

Effective Interest Method

A method of computing the amortized cost of a bond and the interest expense over its life by applying a constant interest rate.

Bond Discounts

The variance between a bond's stated value and the amount it fetches on the market when it ends up selling for beneath that stated value.

Bond Premiums

The amount by which the market price of a bond exceeds its face value, typically due to interest rates being lower than the bond's coupon rate.

Term Bond

A term bond is a type of bond that has a fixed maturity date at which the principal amount is to be paid back to investors.