Which of the Following Tends to Make the Size of a Shift

question 62

Multiple Choice

Which of the following tends to make the size of a shift in aggregate demand resulting from a tax cut smaller than it otherwise would be?

• A)the multiplier effect
• B)the crowding-out effect
• C)the accelerator effect
• D)None of the above is correct.

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Definitions:

European Options

Financial derivatives that give the holder the right, but not the obligation, to buy or sell an asset at a specified price only on the option's expiration date.

Conversion Price

The price per share at which a convertible security, such as convertible bonds or convertible preferred stock, can be converted into common stock.

American Option

A type of options contract that allows the holder to exercise the option at any point up to and including the expiration date.

European Option

A variety of option agreement that is exercisable solely on its expiry date, with no possibility of earlier execution.