Estimated Demand for a Good Is $\hat { Q } = 25 - 5 P + 0.32 M + 12 P _ { R }$

question 19

Multiple Choice

estimated demand for a good is $\hat { Q } = 25 - 5 P + 0.32 M + 12 P _ { R }$ where Q is the quantity demanded of the good,P is the price of the good,M is income,and $P _ { R }$ is the price of related good R.If income decreases by $1,000,all else constant,quantity demanded will ________ by _________ units.

• A)decrease; 320 units
• B)increase; 3.2 units
• C)decrease; 1200 units
• D)increase; 500 units
• E)decrease; 500 units

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Definitions:

Coupon Rate

The annual interest rate paid by a bond expressed as a percentage of the bond's face value.

YTM

Yield to Maturity, the total return anticipated on a bond if held until it matures.

Premium Bonds

Bonds sold for more than their face value due to offering interest rates higher than the current market average.

Discount Bonds

Bonds that are sold for less than their face value, typically reflecting that the market interest rates are higher than the bond's coupon rate.