Asked by Cassie Trucchio on Jul 30, 2024
Verified
Jennifer expects the price of CDs to go up by 10 percent next week.Which of these is most likely to result from such an expectation?
A) Jennifer's demand for CD players will decrease during this week.
B) Jennifer's demand for CDs will decrease during this week.
C) Jennifer's demand for CDs will increase during the following week.
D) Jennifer's demand for CDs will increase during this week.
E) Jennifer's demand for CD players will increase during the following week.
Expectation
The anticipation or belief regarding the future performance of the economy, markets, or individual financial assets.
CDs
Certificates of Deposit, a financial product offered by banks that provides an interest rate premium in exchange for the customer agreeing to leave a lump-sum deposit untouched for a predetermined period.
Price Increase
A rise in the cost of goods or services.
- Understand the impact of expectations on consumer demand.
Verified Answer
ZK
Zybrea KnightJul 31, 2024
Final Answer :
D
Explanation :
If Jennifer expects the price of CDs to go up by 10 percent next week, she is likely to buy more CDs this week to avoid paying a higher price later, thus increasing her demand for CDs during this week.
Learning Objectives
- Understand the impact of expectations on consumer demand.