(Consider This) Which of the Following Best Explains the Significant

question 207

Multiple Choice

(Consider This) Which of the following best explains the significant increases in the equilibrium prices for higher education in the United States since the 1980s?

• A) The demand for higher education is highly price inelastic, and the supply has decreased substantially.
• B) The demand for higher education is highly price elastic, and the supply has decreased substantially.
• C) The supply of higher education is highly price inelastic, and demand has increased substantially.
• D) The supply of higher education is highly price elastic, and demand has increased substantially.

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Definitions:

Nominal Annual Rate

The stated or face interest rate of a financial product, not adjusting for compounding or inflation over time.

Effective Annual Rate

This is the interest rate on an investment or loan that accounts for the effects of compounding over a given period, providing a more accurate picture of financial returns or costs.

Monthly Compounding

The process of calculating interest earnings on the principal and previously earned interest every month.

Nominal Annual Interest Rate

The stated interest rate of a bond or loan, not adjusted for inflation, which indicates the periodic interest payment.