John Gleason Is Interested in Purchasing a 46" Rear Projection

question 95

Multiple Choice

John Gleason is interested in purchasing a 46" rear projection TV for his living room.He knows that right now the TV will cost approximately $1500.John wants to borrow the money to purchase the TV but is a little concerned because he thinks interest rates are going to fall in the future.He is worried that he might get stuck with a loan at a high interest rate.What type of risk is John worried about?

• A)Inflation risk
• B)Interest rate risk
• C)Income risk
• D)Personal risk
• E)Liquidity risk

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Definitions:

Aggregate Production

The total value of goods and services produced within an economy over a specific period.

Base Year Prices

Prices expressed in terms of a specific base year, used to remove the effects of inflation when comparing economic data across different years.

Real GDP

Represents the total economic output of a country, adjusted for inflation, measuring the value of all goods and services produced over a specific time period.

GDP

Gross Domestic Product, which measures the total value of all goods and services produced within a country's borders in a given time period, used as a broad indicator of economic health.