Other Things Equal, If There Is an Increase in Nominal

question 235

Multiple Choice

Other things equal, if there is an increase in nominal GDP,

• A) the demand for money will decrease.
• B) the interest rate will rise.
• C) bond prices will rise.
• D) consumption spending will fall.

---

Definitions:

Oversubscription Privilege

Allows shareholders to purchase unsubscribed shares in a rights offering at the subscription price.

Rights Offering

An opportunity for existing shareholders to purchase additional shares of a company at a predetermined price before the company offers them to the general public.

Underwriting Provision

A term in an agreement that outlines the responsibilities and risks taken by an underwriter in facilitating a public offering of securities.

Private Placements

A method of raising capital through the sale of securities to a small number of selected investors rather than through a public offering.