In the Summer of 2008, Consumers Indicated That They Were

question 219

Multiple Choice

In the Summer of 2008, consumers indicated that they were less optimistic about the future of the economy. Such a change in sentiment is likely to

• A)shift aggregate demand to the right.
• B)increase output.
• C)increase unemployment.
• D)increase prices.

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Definitions:

Total Debt Service Ratio

A debt measure that financial institutions use to evaluate a borrower's ability to manage monthly payments and repay debts.

Gross Monthly Income

The total personal income earned per month before any deductions like taxes or social security contributions.

Compounded Semi-annually

Interest calculation method where interest is computed on the principal and also on the interest from previous six-month periods, applied twice a year.

Amortized

The process of paying off a debt over time in regular installments of interest and principal sufficient to repay the loan in full by its maturity date.