A Decrease in the Demand for a Final Product Will

question 150

Multiple Choice

A decrease in the demand for a final product will cause

• A) a decrease in demand for the resources used to produce the good.
• B) an increase in demand for the resources used to produce the good.
• C) firms to expand production of the good.
• D) an increase in the supply of resources used to produce the good.

---

Definitions:

Straight Bond

A bond with no option features such as callability or convertibility.

Holding-Period Return

The total return received from holding an asset or portfolio of assets over a specific period, often calculated as the income and capital gains during the period.

Strike Price

The fixed price at which the holder of an option can buy (in the case of a call option) or sell (in the case of a put option) the underlying security or commodity.

Call Option

A financial contract that gives the buyer the right, but not the obligation, to buy an asset at a specified price within a fixed period.