Figure 35-9

question 514

Multiple Choice

Figure 35-9. The left-hand graph shows a short-run aggregate-supply SRAS) curve and two aggregate-demand AD) curves. On the right-hand diagram, "Inf Rate" means "Inflation Rate."
-Refer to Figure 35-9. The shift of the aggregate-supply curve from AS1 to AS2

• A) results in a more favorable trade-off between inflation and unemployment.
• B) results in a more favorable trade-off between inflation and the growth rate of real GDP.
• C) represents an adverse shock to aggregate supply.
• D) represents a favorable shock to aggregate supply.

---

Definitions:

Coupon Bonds

Financial securities that pay periodic interest payments and return the principal at maturity.

Market Interest Rates

The current rates at which borrowers can obtain loans or income from investing, influenced by supply and demand in the financial markets.

Par

The face value or nominal value of a bond, stock, or other financial instrument, typically the amount on which interest payments or dividends are calculated.

Zero-Coupon Bond

A debt security that does not pay periodic interest, instead being sold at a discount and maturing at face value, generating profit at redemption.