Refer to the Information Provided in Figure 11

question 22

Multiple Choice

Refer to the information provided in Figure 11.5 below to answer the questions that follow. Figure 11.5
-Refer to Figure 11.5. An increase in the Z factors shifts the ________ to the ________.

• A) Fed rule; left
• B) Fed rule; right
• C) IS curve; left
• D) IS curve; right

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Definitions:

Negative Expected Value

A statistical condition where the anticipated result of an investment is less than the initial cost.

Moral Hazard

The risk that one party to a transaction has not entered into the contract in good faith or has an incentive to take unusual risks because the costs are not borne by that party.

Flat Salary

A flat salary is a fixed amount of pay received by an employee, regardless of the number of hours worked or the quantity of output.

Car Dealership

A business that sells new or used cars at the retail level, typically based on a dealership contract with an automaker or its sales subsidiary.