Answer:
True
Explanation:
The <em>Substitution Effect</em> is the effect on the demand of a certain product because of variations of the prices of the product or the income of households. The concept illustrates how quantities demanded of a product decrease as the population find other products to substitute it.
Answer:
Indication of correct terms:
a. The reward a saver expects on loaned funds: 3. Interest rate
b. The cost a borrower pays for loaned funds: 3. Interest rate
c. The -difference between the real interest rate and the nominal interest rate: 1. Inflation rate
d. The percentage of disposable income that is kept as personal savings: 2. Saving rate
e. The term that indicates most people need to be incentivized to save: 4.Time preference
f. The result consumption exceeding income over a particular period: 5. Dissaving
Explanation:
1. Inflation rate is the ratio of the change in the prices of goods when compared with an indexed figure.
2. Saving rate is the ratio of savings kept behind from disposable income earned. It shows the ratio of income not consumed when earned.
3. Interest rate is the ratio of the amount that is saved or loaned out that people would receive in order to incentivize them to save or lend and prefer the same amount today and in future.
4. Time preference is a term that shows that people value an amount of money today more than they value the same amount received in future. So, they would rather spend that amount today than spending it tomorrow.
5. Dissaving is spending more than income and even tapping into or consuming from the savings account.
false,since the less the number the more cohesion
Answer:
B. Increases the expected present value of lease cash flows to the owner
Explanation:
A lease option gives a right but not the obligation to the renter of the property to buy the said property at today's current market price upon the expiry of lease term.
Lease option is similar to an option contract, the difference being, here instead of securities, leased property serves as the underlying asset and instead of option premium, the renter pays a premium each year in addition to the rental charges.
Lease cash flows refer to the present value of future cash flows which the lessor/owner receives in the form of lease rentals plus the added premium each year.
The more the benefits under lease option clause, the higher the premium charged and thus, more would be the future receipts of owner which would increase the expected present value of lease cash flows to the owner.
