When Borrowing Money, the Most Important Objective of the Borrower

question 17

Multiple Choice

When borrowing money, the most important objective of the borrower should be to:

• A)minimize monthly payments.
• B)minimize the APR.
• C)avoid borrowing on a discount basis.
• D)make the maturity date as far in the future as possible.

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Definitions:

Commodity Money

Money that has intrinsic value and can be used for purposes other than as a medium of exchange, such as gold or silver.

Legal Tender

The government-mandated currency that must be accepted as payment for debts.

Ruble

The official currency of Russia, symbolizing the country's economic activity.

Open-Market Operations

The buying and selling of government securities by a central bank to control the money supply and interest rates.