Jenny Went to the Store and Asked to See an AM-FM

question 171

Multiple Choice

Jenny went to the store and asked to see an AM-FM clock radio with an MP3 player.The salesperson brought out a clock that he said had all the features that Jenny wanted.After looking at the price tag and little else,she said she would think about it.The salesperson said that this was the most popular model sold,that they sold 1000 of them during the World Series alone,that it had the highest rating in Consumer Reports,and that he only had that one left.Jenny bought it.Later she found out that all the statements made to her by the salesperson were false,including the statement that the clock had all the features that she wanted,because it did not have an AM band.Which of the following is true?

• A) Jenny could obtain the remedy of rescission only if the statements made to induce her to contract were fraudulent.
• B) The statements of the salesperson are fraudulent only if the salesperson knew they were false.
• C) Jenny would only have a remedy for breach of contract-namely, the clock did not have an AM band-because none of the other statements was about the radio itself.
• D) The equitable remedy of rescission is available only if Jenny were able to restore the clock to the seller.
• E) Jenny could return this clock to the seller only if she could prove undue influence.

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Definitions:

Term Deposit

A bank deposit with a fixed term and typically a fixed rate of interest, where withdrawal can only occur after the term ends without penalty.

Holding Cash

The practice of keeping money in the form of physical currency as a store of value or for transactions.

Money Demand Curve

A graphical representation showing the relationship between the quantity of money people want to hold and the interest rate, under the assumption that all other determinants of demand are unchanged.

Nominal Interest Rate

The interest rate actually paid for a loan, not adjusted for inflation.