If an Economist Finds That When Consumer Incomes Increase, Consumers

question 28

Multiple Choice

If an economist finds that when consumer incomes increase, consumers buy more cars, Ceteris paribus , then

• A) the price of cars must be decreasing.
• B) all other things remain constant.
• C) the price of gas must be decreasing.
• D) the interest rate on car loans must be decreasing.

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Definitions:

Issue Date

The date on which a security (like a bond or stock) is issued or made available for sale.

Discounted Present Value

The current worth of a future sum of money or stream of cash flow given a specified rate of return.

Additional Paid-In Capital

Capital received from investors for shares, exceeding the par value of the shares, often reflecting the premium paid over nominal value.

Market Value

The ongoing pricing level at which a service or asset is offered for buying or selling in the market environment.