Suppose That You Need $3000 to Purchase a Car

question 100

Multiple Choice

Suppose that you need $3000 to purchase a car. If you are applying for a discounted loan at an interest rate of 5% per year for two years, how much do you need to borrow to cover the principal?

• A) $3000
• B) $3111.11
• C) $3222.22
• D) $3333.33

Understand the concept and implications of budget balance, deficit, and surplus within the framework of fiscal policy.

Comprehend the roles and effects of automatic stabilizers in an economy, including their advantages and how they function during economic fluctuations.

Grasp the foundational principles of the multiplier effect and its impact on national income and employment levels.

Identify and evaluate the mechanisms and effectiveness of discretionary fiscal policy in managing economic cycles.

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Definitions:

Price Floor

A government-set minimum price that can be charged for goods and services, aimed at protecting producers.

Equilibrium Price

The price at which the quantity of goods supplied matches the quantity of goods demanded.

Price Ceiling

A price ceiling is a government-imposed limit on how high a price can be charged for a product or service, typically intended to protect consumers.

Price Ceiling

A legally imposed maximum price on a good or service, intended to prevent prices from rising above a certain level, often leading to shortages.