Assume a New Technology Further Reduces the Cost of Producing

question 67

Multiple Choice

Assume a new technology further reduces the cost of producing calculators.Also assume that consumers have cut back on their scheduled purchases in anticipation of even more cost-saving developments.As a result, we can expect

• A)a decrease in price but no predictable change in output.
• B)a decrease in output but no predictable change in price.
• C)an increase in output but no predictable change in price.
• D)a predictable decrease in both output and price.

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Definitions:

Face Value

The nominal value stated on a financial instrument, such as a bond or stock, representing its worth at issuance.

Serial Bonds

Bonds that are issued at the same time but mature at different intervals, allowing for the gradual repayment of the debt.

Maturity Dates

The specified dates on which the principal amount of a debt instrument, such as a bond or loan, is to be repaid to the lender.

Interest-bearing Notes

A debt instrument that pays interest to the lender, including a specified interest rate and maturity date.