If Joan Is Applying for a Loan for a Shelving

question 42

Multiple Choice

If Joan is applying for a loan for a shelving system to improve her retail sales where the system will serve as collateral,what type of loan would be the most appropriate?

• A)chattel mortgage
• B)line of credit
• C)real estate mortgage
• D)term loan

---

Definitions:

Purchasing Power

Purchasing power is the value of a currency expressed in terms of the amount of goods or services that one unit of money can buy.

Substitution Effect

The change in consumption patterns due to a change in the relative prices of goods, leading consumers to substitute one good for another.

Relative Prices

The price of one good or service compared to another, often used to indicate the value or cost-effectiveness between different items.

Substitution Effect

Substitution Effect occurs when consumers replace more expensive items with cheaper alternatives in response to changes in relative prices, holding their overall satisfaction constant.