The Law of Demand States

question 101

Multiple Choice

The law of demand states:

• A)that price and quantity demanded are inversely related.
• B)that price and quantity demanded are inversely related, holding all other factors that influence demand fixed.
• C)that demand for a good comes from the desire of buyers to directly consume the good itself.
• D)an increase in demand results in an increase in price.

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Definitions:

Liabilities

Financial obligations or debts that a company or individual owes to others, which need to be settled over time by transferring economic benefits.

Closed-End Funds

A type of investment fund with a fixed number of shares, traded on the stock exchange, unlike open-end funds which continuously issue new shares.

Premium

The amount by which the price of a financial instrument, such as an insurance policy or bond, exceeds its face value or nominal cost.

NAV

Net Asset Value; the total value of a fund's assets minus its liabilities, often used in the context of mutual funds.