Figure 35-4

question 4

Multiple Choice

Figure 35-4.The left-hand graph shows a short-run aggregate-supply (SRAS) curve and two aggregate-demand (AD) curves.On the left-hand diagram,the price level is measured on the vertical axis;on the right-hand diagram,the inflation rate is measured on the vertical axis.
-Refer to Figure 35-4.What is measured along the horizontal axis of the right-hand graph?

• A)the interest rate
• B)the price level
• C)the government's budget deficit as a percent of GDP
• D)the unemployment rate

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Definitions:

Effective-interest

A method of calculating the interest rate on a loan or financial product that takes into account compound interest and fees, providing a true annual rate.

Amortization

The method of distributing the expense of a non-physical asset across its lifespan.

Market Rate

The prevailing rate of interest available in the marketplace for securities or loans.

Bond Issue

The process of offering bonds for sale to investors by an issuer as a method of raising capital.