Joshua,a Merchant,promises in a Signed Writing to Pedro,a Consumer,to Hold

question 5

Multiple Choice

Joshua,a merchant,promises in a signed writing to Pedro,a consumer,to hold an offer to sell goods open for five months without Pedro giving consideration in exchange.However,Joshua sells the goods to another consumer and Pedro sues him for breach of contract.Which of the following is true of this case?

• A)Joshua is not bound by the contract,since firm offers cannot exceed three months.
• B)Since Joshua is a merchant and is bound by a firm offer made to Pedro,he has breached contract.
• C)The UCC will not enforce this contract as a firm offer as both parties are not merchants.
• D)Joshua is bound by this offer only if a five month offer is customary for this type of good.

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Definitions:

Multiplier

In economics, a factor by which a change in spending will be magnified in the overall economy, affecting output and income levels.

MPC

Marginal Propensity to Consume, which measures the proportion of additional income that an individual spends on consumption.

Aggregate Demand

The complete appetite for goods and services in an economy, marked by an overarching price level throughout a specified duration.

Real GDP

The measure of a country's economic output (Gross Domestic Product) adjusted for price changes, such as inflation or deflation, to reflect the real value of goods and services produced.