If you know that you can afford a $500 per month car payment for the next 48 months, the interest rate is positive, and you have found a car dealer who will agree to a zero down payment, you will
A. be able to afford something less than a $24,000 car.
B. be able to afford a $24,000 car (which is exactly $500 × 48).
C. be able to finance a more expensive car when the interest rate is high.
D. be able to afford a $25,000 car (which is more than $500 × 48).
Answer: A
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If the economy is growing 5% a year and GDP is $1000 billion, the additional revenues available to meet interest payments on the government deficit would be, ceteris paribus,
A) 50. B) 500. C) It depends upon the amount of new debt issued. D) There would be no additional revenues.
Barriers to entry are
a. not too difficult to overcome in a monopoly market structure b. very high in a perfectly competitive market structure c. nonexistent in an oligopoly market structure d. not too difficult to overcome in a monopolistically competitive industry structure e. nonexistent in a monopoly market structure
When the markets of an economy are more competitive, economic growth
a. is harmed by the resulting low rates of profit for industry. b. is enhanced because producers have a stronger incentive to provide goods efficiently. c. will be slower because prices do not rise as rapidly. d. is unaffected.
Exhibit 15-1 Balance sheet of First Iliad State Bank Assets Liabilities Required reserves$ 1,000,000 Demand deposits$10,000,000 Excess reserves0 Loans$ In Exhibit 15-1, if the required reserve ratio is raised to 15 percent, First Iliad State will have to convert loans worth:
A. $9,000,000 to required reserves. B. $1,500,000 to required reserves. C. $500,000 to required reserves. D. $1,000,000 to required reserves.