A Change in Which of the Following Alters Buying Plans

question 254

Multiple Choice

A change in which of the following alters buying plans for cars but does NOT shift the demand curve for cars?

• A) A 20 percent increase in the price of a car.
• B) An increased preference for walking rather than driving.
• C) A 5 percent increase in peopleʹs income.
• D) A 10 percent decrease in the price of car insurance.

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Definitions:

After-Tax Rate

The rate of return on an investment after accounting for taxes, more reflective of the net gain to the investor.

Safety Of Principal

The assurance that an investment will be repaid or retained, primarily concerning the preservation of invested capital.

Diversified Portfolio

An investment strategy that involves spreading investments across various asset classes to reduce risk.

Investment Horizon

The length of time an investor expects to hold an investment before liquidating it.