An Increase in the Demand for Gasoline Today Caused by Concerns

question 24

Multiple Choice

An increase in the demand for gasoline today caused by concerns that gasoline prices will be higher tomorrow is most likely attributable to a change in:

• A)income.
• B)consumer expectations.
• C)consumer preferences.
• D)prices of other goods.

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Definitions:

Tax-Exempt

A status of financial or material exemption from the requirement to pay taxes granted by government authorities.

Present Value

The now-value of a later financial sum or succession of monetary flows, using a determined rate of return as the basis for calculation.

Interest Rate

This is the percentage of a sum of money charged for its use.

Equilibrium Interest Rate

The equilibrium interest rate is the interest rate at which the supply of loanable funds equals the demand, reflecting a balance in the financial market.