Suppliers of Wrapping Paper Have Reduced Supply Since the Gift-Giving

question 261

Multiple Choice

Suppliers of wrapping paper have reduced supply since the gift-giving season has passed. Suppliers are MOST likely responding to

• A) higher prices of ink.
• B) their expectation that the price of wrapping paper will fall in the marketplace.
• C) a decrease in consumers' income.
• D) increased government regulation in the paper industry.

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Definitions:

Effective Annual Rate

The annual return on an investment or loan taking compounding into account, expressed as a percentage.

Compounded Annually

This is an interest calculation method where interest is added to the principal once a year.

Effective Rate

The actual interest rate of an investment or loan, taking into account the effects of compounding.

Compounded Semi-Annually

Interest calculation method where the interest is added to the principal sum twice a year, causing the interest to earn interest.