1. Which of the following is an example of capital loss?
a. An investor sells a bond on the secondary market below the price she paid for it.
2. Nasdaq, the American Stock Exchange, and the OTC market collectively form the
c. stock market
3. Does a low interest rate encourage people to borrow or to save? Explain.
c. A low interest rate encourages people to borrow because interest rates are paid to savers by borrowers, so a low interest rate means a low opportunity cost for borrowing.
4. Define autonomous consumption.
d. Autonomous consumption is the amount that a person must spend on basic needs (such as food and housing) regardless of his or her income.
5. A student borrowed $40,000 for college and, over the course of the loan, repaid $55,000. What was the principal of the loan?
d. $40,000
Hope this helps! :)
