Pat Goes to the Local Stereo Store to Learn About

question 93

Multiple Choice

Pat goes to the local stereo store to learn about high-end equipment.The salesperson spends an hour talking with Pat and demonstrating equipment.Pat then leaves and orders a system from an Internet store and saves $250.Pat's behavior is

• A)illegal.
• B)statistical discrimination.
• C)free riding.
• D)adverse selection.

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Definitions:

Car Loan

A financial loan issued for the specific purpose of purchasing a car, typically involving interest and a repayment plan over a set period.

Compounded Semi-Annually

A method of calculating interest where the calculation is done twice a year, and the interest from the first half is added to the principal for the second half calculation.

Financial Institutions

Businesses that provide financial services, including banks, credit unions, and insurance companies.

Compounded Semi-Annually

Interest on an investment or loan calculated twice a year, adding each interest payment to the principal.