Nick Wants to Buy a New Car,and Is Planning to Borrow

question 14

True/False

Nick wants to buy a new car,and is planning to borrow the money for his purchase from a bank.He read in the newspapers that the Federal Reserve is likely to implement policies in the next few weeks that are designed to stimulate the economy.Nick would probably get a lower interest rate on his car loan if he waits until after the FED implements its new policies.
Level of Learning 3: Application of principles

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Definitions:

Total Variable Costs

These are expenses that change in proportion to the activity of a business, such as costs for raw materials or production.

Output

The quantity of goods or services produced within a given period by a firm, industry, or economy.

Average Variable Costs

The total variable costs divided by the number of units produced, representing the variable cost per unit of output.

Total Variable Cost

The total of all costs that vary with output level in the short run.