Refer to the Following Figure When Answering the Following Questions

question 29

Multiple Choice

Refer to the following figure when answering the following questions.
Figure 14.3: AS/AD Model

-Consider Figure 14.4. Throughout the first three-fourths or so of 2009 the:

• A) real interest rate on 10-year bonds was lower than the nominal interest rate.
• B) 10-year-bonds' nominal interest rate was higher than the real interest rate.
• C) inflation rate was negative.
• D) real interest rate was negative.
• E) inflation rate was higher than the nominal interest rate.

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Definitions:

Elasticity

An indicator of the degree to which the demand or supply of a product fluctuates following a variation in its price.

Resource Demand

The desire and ability of consumers or firms to acquire specific quantities of resources at various prices.

Marginal Revenue Product

The increased earnings resulting from the application of an extra unit of a resource, such as capital or labor.

Demand Schedule

A diagram indicating the volume of goods or services that purchasers intend and can afford to buy across a range of prices.