To Say That a Change in Taste Causes Prices to Rise

question 47

Multiple Choice

To say that a change in taste causes prices to rise is to claim that

• A)transfer prices are a more accurate gauge of economic activity than market prices.
• B)prices are a signal.
• C)the economy has full information.
• D)prices would not change if people did not know the exact reason for the price change.
• E)price changes cannot be predicted.

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Definitions:

Note Discounted

A financial term referring to a promissory note that is sold for less than its face value before it reaches maturity.

Interest Calculations

The process of figuring out the amount of interest to be added to the principal amount of a loan or deposit, based on the rate and the time.

Payment Maturity

The date on which a financial obligation must be repaid in full.

Note Issuance

Note issuance involves the creation and offering of a promissory note, a financial instrument wherein the issuer promises to pay a specific amount to the holder on demand or at a future date.