Factors That Can Cause the Supply Curve for Bonds to Shift

question 54

Multiple Choice

Factors that can cause the supply curve for bonds to shift to the right include

• A) an expansion in overall economic activity.
• B) a decrease in expected inflation.
• C) a decrease in government deficits.
• D) a business cycle recession.

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Definitions:

MR = MC

A condition in economics where marginal revenue equals marginal cost; it's the optimal production point for firms maximizing their profit.

Monopolistically Competitive

Refers to a market structure where many companies sell products that are similar but not identical, allowing for some degree of market power and product differentiation.

Positive Economic Profits

Situations where a firm's total revenues exceed all its costs, including opportunity costs, indicating that it is earning more than the minimum required to stay in business.

Monopolistically Competitive

A market structure where many firms sell products that are similar but not identical, allowing for slight differentiation and some control over pricing.