The Figure Given Below Shows the Demand [D and D']

question 26

Multiple Choice

The figure given below shows the demand [D and D'] and supply [S and S'] curves of shares of stock.Figure 17.2

-If bonds and stocks are considered to be substitute goods, and the investors expect stock prices to drop in the near future, _____.

• A)the price of bonds will also decline
• B)the supply of bonds will increase
• C)the interest rate on bonds will decline
• D)the demand for stocks will increase
• E)the demand for bonds will decline

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Definitions:

Operating Activities

The day-to-day actions and transactions that relate to the primary operations of a business, such as sales and purchasing.

Cash Payments

Cash payments refer to transactions where cash is transferred from one party to another, typically as a method of settling debts or paying for goods and services.

Direct Method

A cash flow statement preparation approach that lists major classes of gross cash receipts and payments, providing a clear view of a company's operating cash flows.

Operating Activities

The primary revenue-producing activities of a business and other activities that are not investing or financing, which are reflected in the cash flows from operating activities section of the cash flow statement.