Figure 4-14 -Refer to Figure 4-14.Which of the Following Would Explain a Would

question 49

Multiple Choice

Figure 4-14
-Refer to Figure 4-14.Which of the following would explain a movement from E1 to E2?

• A)There is an improvement in the technology used to produce this good.
• B)The cost of an input to the production of this good increases.
• C)This good becomes very popular.
• D)The price of a substitute good decreases.

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Definitions:

Adjustable Rate Mortgage

A type of mortgage in which the interest rate applied on the outstanding balance varies throughout the life of the loan according to market conditions.

Fixed Rate Mortgage

A mortgage in which the interest rate remains constant throughout the term of the loan.

Interest Rate

is the cost of borrowing money or the return on investment in a savings account, usually expressed as a percentage of the principal over a period of one year.

Tax Free Municipal Bond

A type of bond issued by local governments or their agencies, the interest from which is exempt from federal income taxes.