A Normal Good Is DEFINED as a Good

question 107

Multiple Choice

A normal good is DEFINED as a good

• A) for which demand increases when the price of a complement falls.
• B) for which demand increases when income increases.
• C) with a downward-sloping demand curve.
• D) for which demand increases when the number of demanders increases.
• E) for which demand increases when the price of a substitute rises.

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Definitions:

Call Price

The specified price at which a callable bond can be redeemed by the issuer before its maturity.

Mortgage-Backed Security Tranches

Portions of a mortgage-backed security segregated by risk, payment timing, or other characteristics to suit different investors.

Default Risk Exposure

The likelihood that a borrower will be unable to make required payments on their debt obligations.

Investment

The allocation of resources, usually money, with the expectation of generating an income or profit.