Exhibit 16

question 20

Multiple Choice

Exhibit 16.2.Typically,the sales volume declines with an increase of a product price.It has been observed,however,that for some luxury goods the sales volume may increase when the price increases.The following Excel output illustrates this rather unusual relationship. Refer to Exhibit 16.2.Using the cubic regression equation,predict the sales if the luxury good is priced at $100.

• A)1171.85
• B)1133.10
• C)1106.61
• D)1092.91

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Definitions:

Reserve Requirements

Regulations set by central banking authorities that determine the minimum amount of reserves that banks must hold against deposits.

Lending Ability

The capacity of financial institutions to provide loans to individuals or businesses, based on available capital and regulatory constraints.

United States Government Securities

Financial instruments issued by the federal government to finance its budget deficits and raise capital, including Treasury bonds, notes, and bills.

Interest Rate

The rate at which a borrower pays interest to a lender for borrowing money.