Giffen Goods

question 41

Multiple Choice

Giffen goods:

• A)are normal goods with a negative income effect.
• B)are inferior goods with an income effect that is smaller in magnitude than the substitution effect.
• C)are inferior goods with an income effect that is greater in magnitude than the substitution effect.
• D)have downward sloping demand curves.

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Definitions:

Call Provision

A feature of a bond or other fixed-income security that allows the issuer to repurchase and retire the debt before its maturity date.

Par Value

The face value of a bond or stock as stated by the issuer, which is not necessarily indicative of its market value.

Maturity Date

The specific date on which the principal amount of a financial instrument is to be paid back in full.

Bond Ratings

Evaluations of the credit quality and risk of default of a bond, issued by rating agencies, influencing interest rates and investor demand.