3 the Multiplier -When Autonomous Expenditure Decreases

question 403

Multiple Choice

3 The Multiplier
-When autonomous expenditure decreases,

• A) the AE curve shifts downward.
• B) there is a movement down along the AE curve.
• C) the AE curve becomes less steep.
• D) the AE curve shifts upward.

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Definitions:

Put Option

An economic arrangement empowering the bearer with the right, albeit without the obligation, to sell a defined amount of a principal asset at a determined price within a set duration.

Call

An option contract that gives the holder the right, but not the obligation, to buy a specified amount of an underlying asset at a specified price within a specified time.

Put Option

An agreement that grants the holder the option, without the requirement, to sell a predetermined quantity of a fundamental asset at an agreed-upon price during a defined period.

Forward Contracts

Customized contracts between two parties to buy or sell an asset at a specified price on a future date, used for hedging or speculation.