If Autonomous Consumption Rises,the TE Curve Shifts __________,The Marginal Propensity

question 31

Multiple Choice

If autonomous consumption rises,the TE curve shifts __________,the marginal propensity to consume __________,and the TP curve __________.

• A) upward; rises; shifts downward
• B) upward; remains unchanged; remains unchanged
• C) downward; rises; remains unchanged
• D) upward; remains unchanged; shifts downward
• E) none of the above

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Definitions:

Exercise Price

The specified price at which an option holder can buy (in a call option) or sell (in a put option) the underlying asset.

Leveraged Firm

A company that uses a high level of debt to finance its operations.

Call Option

A financial contract that gives the buyer the right, but not the obligation, to buy an asset at a specified price within a specific time.

Bond

A fixed income instrument that represents a loan made by an investor to a borrower, typically corporate or governmental.