If Consumption Changes Because of a Change in a Factor

question 32

Multiple Choice

If consumption changes because of a change in a factor other than the price level,then the

• A) economy moves from one point on an AD curve to another point on the same curve.
• B) AD curve shifts.
• C) economy moves from one point on a short-run aggregate supply (SRAS)curve to another point on the same curve.
• D) SRAS curve shifts.
• E) none of the above

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Definitions:

Bondholder

An investor or institution that owns bonds issued by a corporation or government, entitling them to receive fixed interest payments and the return of principal at maturity.

Maturity

Maturity refers to the date on which the principal or face value of a financial instrument, such as a bond or loan, becomes due and payable.

Debenture

A type of debt instrument not secured by physical assets or collateral but based on the creditworthiness and reputation of the issuer.

Collateralized

Secured by an asset or property as a guarantee for the repayment of a loan.