Match the Following Terms with Their Definitions

question 28

Multiple Choice

Match the following terms with their definitions.
-Effective rate

• A)Number of days bank will wait for its money in the discount process
• B)Cash paid on due date
• C)The principal
• D)Maturity value minus bank discount
• E)A written promise
• F)Bank deducts interest in advance
• G)Signs the note
• H)Rate bank charges in the discounting process
• I)True rate of interest
• J)Due date
• K)Ability to borrow quickly
• L)Amount bank charges in the discounting process
• M)Maturity value greater than original note

---

Definitions:

Producer Surplus

The difference between what producers are willing to sell a good for and the actual market price they receive, representing a measure of producer welfare.

Average Cost

The total cost divided by the quantity produced, indicating the cost per unit of output.

Competitive Industry

An industry characterized by a large number of firms competing against each other, leading to innovation, varied product choices, and reasonable prices for consumers.

Marginal Cost

The cost associated with producing one more unit of a product, reflecting how production costs change with output levels.