Refer to Figure 10.7. A movement from point A to point D could be caused by
A) a positive demand shock accompanied by an increase in the default-risk premium.
B) a decrease in consumer confidence accompanied by a decrease in the expected rate of inflation.
C) a negative demand shock accompanied by an increase in the target interest rate.
D) an increase in consumer confidence accompanied by a decrease in the term premium investors expect in the future.
A
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If consumers decide to be more frugal and save more out of their income, then this will cause
A) a movement to the left along the supply curve for loanable funds. B) a shift in the supply curve for loanable funds to the left. C) a movement to the right along the supply curve for loanable funds. D) a shift in the supply curve for loanable funds to the right.
Under monopolistic competition
A. there is no distinction between the short run and the long run. B. there are very few firms in the industry. C. all the firms produce an identical product. D. each firm breaks even in the long run.