What Is the Interest Rate on a Canada Student Loan

question 27

Multiple Choice

What is the interest rate on a Canada Student Loan if the prime rate is 5%?

• A)2.5%
• B)5%
• C)7.5%
• D)10%
• E)12.5%

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Definitions:

Utility Function

A numerical model that explains how a consumer gains pleasure or usefulness from using goods and services.

Substitution Effect

The change in consumption patterns due to a change in the relative prices of goods, holding the consumer's utility level constant.

Income Effect

The alteration in the income of a person or the economy, and its effect on the amount of a product or service that is requested.

Substitution Effect

The change in consumption patterns due to a change in the relative prices of goods, causing consumers to substitute away from more expensive goods towards cheaper ones.