Although the Prime Rate Is the Rate That U

question 83

True/False

Although the prime rate is the rate that U.S. banks charge their most credit-worthy customers, the prime rate is normally higher than the London Interbank Offered Rate (LIBOR).

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Definitions:

Utility

A measure of satisfaction, usefulness, or pleasure derived from consuming goods and services.

Budget Constraint

A limit on the consumption bundles that a consumer can afford given the prices of goods and the consumer's income.

Utility

The satisfaction or benefit derived from the consumption of goods and services.

Optimal Consumption Bundles

Combinations of goods and services that provide the highest utility to a consumer given his or her preferences and budget constraints.