Rising Prices for a Product

question 180

Multiple Choice

Rising prices for a product

• A) create incentives for consumers to find cheaper substitutes.
• B) eliminate shortages.
• C) create incentives for businesses to produce more.
• D) decrease quantity demanded of the product.
• E) do all of the above.

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Definitions:

Bank

A financial institution licensed to receive deposits, offer loans, and provide various financial services to individuals or businesses.

Present Value

The modern equivalent value of a future monetary sum or cash flow sequence, with an established return rate.

Interest Rate

The percentage charged on a loan or paid on deposited funds, representing the cost of borrowing or the gain on savings.

Future Value

The value of a current asset at a specified date in the future based on an assumed rate of growth.