Which of the Following Would Be Most Likely to Induce

question 27

Multiple Choice

Which of the following would be most likely to induce Congress and the president to conduct contractionary fiscal policy? A significant

• A)decrease in oil prices.
• B)decrease in real GDP.
• C)increase in inflation.
• D)increase in labor productivity.

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Definitions:

Amortization of Bond Premium

The gradual expense recognition of the premium paid over par value for a bond over its life, reducing the bond investment value.

Discount on Bonds Payable

The shortfall between a bond's listed face value and the price it achieves in the market when it ends up selling for less than that face value.

Face Amount

The face amount is the nominal or dollar value printed on a financial instrument like a bond or insurance policy, representing the amount due at maturity or the coverage amount.

Bond Redemption

A financial term referring to the process of repaying the principal amount of a bond at its maturity date.