Nick wants to buy a new car,and is planning to borrow the money for his purchase from a bank.He read in the newspapers that the Federal Reserve is likely to implement policies in the next few weeks that are designed to stimulate the economy.Nick would probably get a lower interest rate on his car loan if he waits until after the FED implements its new policies.
Level of Learning 3: Application of principles

Question

Quizplus · Accepted Answer

The principle being applied here is that when the Federal Reserve implements policies to stimulate the economy, interest rates tend to go down. Therefore, if Nick waits until after the implementation of such policies, he is likely to get a lower interest rate on his car loan, making option A true.

Nick Wants to Buy a New Car,and Is Planning to Borrow