If Both the Demand Curve and the Supply Curve Shift

question 140

Multiple Choice

If both the demand curve and the supply curve shift to the right, we can unambiguously conclude that the

• A) market clearing price will increase.
• B) market clearing price will decrease.
• C) equilibrium quantity will increase.
• D) equilibrium quantity will decrease.

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Definitions:

Par

The face value of a bond or other security, at which it can be redeemed at maturity or the amount of money equal in value to a particular share or bond.

Coupon

The yearly payment of interest to those holding bonds, represented as a percentage of the bond's nominal value.

Semi-Annual Coupon

A bond payment made to bondholders twice a year, representing interest on the bond's face value.

Effective Annual Yield

The actual interest rate an investment earns in a year, taking into account the effects of compounding.