Your Debt Safety Ratio

question 138

Multiple Choice

Your debt safety ratio

• A) does not include your home mortgage payment.
• B) is acceptable if it stays below 30%.
• C) need not be calculated for consumer loans.
• D) is calculated only for credit card debt.
• E) is a percentage of your gross income.

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Definitions:

Market Equilibrium

The point in a market where the quantity demanded by consumers equals the quantity supplied by producers, resulting in a stable price.

Negative Externality

An adverse effect on a third party not directly involved in a transaction, which results from economic activity without compensation.

Negative Externality

A cost suffered by a third party due to an economic transaction, without compensation.

After-Tax Equilibrium

The balance reached in the market after accounting for the effects of taxes.