Mona and Nero Want to Discharge Their Contract by Executing

question 41

Multiple Choice

Mona and Nero want to discharge their contract by executing a new agreement with performance different from what they originally promised.They can best accomplish this by

• A)a mutual agreement to rescind.
• B)an accord and satisfaction.
• C)a novation.
• D)an alteration of the original contract.

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Definitions:

Purchasing Power

Purchasing power is the value of a currency expressed in terms of the amount of goods or services that one unit of money can buy.

Substitution Effect

The change in consumption patterns due to a change in the relative prices of goods, leading consumers to substitute one good for another.

Relative Prices

The price of one good or service compared to another, often used to indicate the value or cost-effectiveness between different items.

Substitution Effect

Substitution Effect occurs when consumers replace more expensive items with cheaper alternatives in response to changes in relative prices, holding their overall satisfaction constant.