Which Best Describes the Prime Rate of Interest

question 19

Multiple Choice

Which best describes the prime rate of interest?

• A)The lending rate banks charge their most creditworthy clients
• B)The yield on 91-day treasury bills
• C)The yield on 30-year government bonds
• D)The lending rate the Bank of Canada charges financial institutions.
• E)The base rate for all mortgages

Analyze the impact of consumer behavior on saving and consumption patterns.

Grasp the mathematical relationship between APC and APS, including understanding their inversely proportional nature.

Understand the factors influencing autonomous and induced consumption.

Identify the effects of interest rate changes on savings and consumption.

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Definitions:

Probability

A measure of the likelihood that an event will occur, expressed as a number between 0 and 1, where 1 indicates certainty.

Marginal Probability

The probability of an event occurring, irrespective of the outcomes of other variables.

P(A or B)

The probability that at least one of two events A or B occurs.

Outcome

The result or consequence of an action, experiment, or situation.