Use the Following to Answer Questions

question 41

Multiple Choice

Use the following to answer questions :
Figure: Shifts in Demand and Supply IV
-(Figure: Shifts in Demand and Supply IV) Look at the figure Shifts in Demand and Supply IV. The figure shows how supply and demand might shift in response to specific events. Suppose half of the people in San Diego pack up and move to Colorado Springs. Which panel BEST describes how this will affect the supply of houses in San Diego?

• A)panel A
• B)panel B
• C)panel C
• D)panel D

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Definitions:

Variable Rate Loan

A loan where the interest rate can fluctuate over time based on changes in an underlying benchmark interest rate or index.

Discount Rate

The interest rate used to determine the present value of future cash flows.

Call Option

A financial contract that gives the buyer the right, but not the obligation, to buy a specified amount of an underlying asset at a set price within a specified time.

Put Option

A financial agreement granting the holder the option, but no requirement, to sell a certain quantity of an underlying asset at a predetermined price during a defined period.