Total Revenue from the Sale of a Good Will Decrease

question 172

Multiple Choice

Total revenue from the sale of a good will decrease if

• A)income increases and the good is a normal good.
• B)its price rises and demand is elastic.
• C)its price rises and demand is inelastic.
• D)income falls and the good is an inferior good.
• E)its price falls and demand is elastic.

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Definitions:

Longer Maturities

Refers to bonds or other fixed-income securities that have a longer time until the final repayment date.

Pure Yield Pickup Swap

A strategy where an investor swaps out of one bond into another with the aim of achieving a higher yield.

Price Risk

The possibility that the value of a financial instrument or asset will fluctuate due to changes in market prices, affecting investors' returns.

Reinvestment Rate Risk

The risk that income from an investment will be reinvested at a lower rate than the original investment.