An Increase in Productivity Will Cause

question 51

Multiple Choice

An increase in productivity will cause

• A)AD to increase (move to the right).
• B)AD to decrease (move to the left).
• C)AS to increase (move to down and to the right).
• D)AS to decrease (move to up and to the left).

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Definitions:

Fair Value Hedge

A type of hedging strategy used to mitigate risk by adjusting the fair value of a hedged asset or liability to reflect changes in market conditions.

Foreign Exchange Gain

A gain resulting from changes in exchange rates between currencies, affecting the value of foreign currency-denominated assets or liabilities.

Consolidated Income Statement

A consolidated income statement presents the financial performance of a parent company and its subsidiaries as one combined entity.

Forward Exchange Contract

A financial agreement between parties to exchange currencies at a predetermined future date and rate.