Why Does Consumption Often Exceed the Income of Poor Families

question 71

Essay

Why does consumption often exceed the income of poor families?

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Definitions:

Prompt Payment Discount

A discount offered by sellers to buyers for paying their invoices early.

Liable

Legally responsible or obligated.

Compensating Balance

A compensating balance is a minimum account balance that a borrower must maintain with a lender as part of the loan agreement.

Effective Interest Rate

The real rate of interest earned or paid on an investment or loan, taking into account the effect of compounding.