Decide to greatly reduce the availability of student loans

Assignment Help Business Economics
Reference no: EM13854227

Suppose the chartered banks decide to greatly reduce the availability of student loans that are guaranteed against default by the Canadian government.

a. What would you expect to happen to the demand for credit cards by students?

b. What would you expect to happen to the quantity of credit cards issued to students? To the willingness of students to incur debt at the much higher rates of interest charged on credit cards?

c. Are credit cards a substitute, albeit an imperfect one, for student loans? What sign (positive or negative) would you expect for the cross-price elasticity of demand for credit cards with respect to interest rates charged to students for other forms of credit?

Reference no: EM13854227

Questions Cloud

The average annual cost of automobile insurance : The average annual cost of automobile insurance is $687. Use this value as the population mean and assume that the population standard deviation is $230. Consider a sample of 121 automobile insurance policies. What is the probability that the sample ..
Firm operates in goods markets-capital markets-labor markets : Suppose a firm uses both labor L and capital K as inputs to production. Its production function is of the Cobb-Douglas form, i.e. F (K,L) = K^1/3 L^2/ 3. Express the firm’s real revenues, real costs and real profits in terms of the variables defined ..
Included in its benchmarking program : How does a firm determine which measures should be included in its benchmarking program?
About shift of the demand curve in each case : Suppose that the income of the average Canadian household increases because a larger percentage of women enter the labour force. What do you think will happen to demand for the following products or services? What does your answer imply about income ..
Decide to greatly reduce the availability of student loans : Suppose the chartered banks decide to greatly reduce the availability of student loans that are guaranteed against default by the Canadian government. What would you expect to happen to the demand for credit cards by students? Are credit cards a subs..
Marginal utility of meat at former levels of consumption : In the early part of the 21st century the high protein Atkins diet became quite popular in the US. Explain what the popularity of this diet would do for demand for a high protein food like meat and for the marginal utility of meat at former levels of..
Demand causes equilibrium price and equilibrium quantity : According to the Huffington Post on September 19, 2012,“Demand for the new Apple Inc iphone 5 has been incredible,' AT&T Inc Chief Executive Randall Stephenson said on Wednesday." The increase in demand causes equilibrium price to _ and equilibrium q..
What happens when price ceiling is below the equilibrium : What happens if the price floor is above the equilibrium? and what happens when price ceiling is below the equilibrium?
Graham crackers are complements in consumption : If marshmallows and graham crackers are complements in consumption, an increase in the price of marshmallows causes a(n)__ for graham crackers.

Reviews

Write a Review

Business Economics Questions & Answers

  Determine exchange rates-why are exchange rates so volatile

What are the main factors that determine exchange rates? Why are exchange rates so volatile?

  Barriers to entry are forces that inhibit

Barriers to entry are forces that inhibit firms from entering new markets. These forces may result from practical and legal constraints. How do you think barriers to entry and product homogeneity affect the competitive nature of industries? For examp..

  Federal reserve is considered independent

The Federal Reserve is considered independent because. National banks must take overnight loans from the Federal Reserve. One reason the Federal Reserve can conduct active monetary policy is that the dollar has a floating exchange rate.

  Q 1 briefly summarize the ingredients determinants of

q. 1. briefly summarize the ingredients determinants of economic growth.2. what phase of the business cycle is the u.s.

  Change the individual demand curve for aspirin tablet

Indicate how each of the following factors will change the individual demand curve for aspirin tablets: An increase in the price of bottle water (a complement)

  What is the total savings of scheduling maintenance

If each maintenance check costs $220 and the machine is expected to provide 30,000 hours of service, what is the total savings of scheduling maintenance every 6,000 hours over 3,000 hours?

  Derive the total product or output

Suppose you are given the following Total Product Function: ,where Q is total output or units produces; K, capital; L, labor; and M, materials.; that is, this is a input factor production function. Suppose K = 1,000; L = 200 workers; and M = value of..

  Relationship between employment and economic activities

If employment in a country decreases when the economic activities of that nation declines, the relationship between employment and economic activities can be considered as which of the following?

  What is the probability that more than cars will require

What is the probability that more than 200 cars will require service work in a particular month? What is the probability that fewer than 175 cars will need service work in a given month?

  Taxable income-nation has a tax rate

A nation has a tax rate of 20% on the first $20,000 of taxable income, 30% on the next $30,000, 40% on the next $20,000 and then 50% on all taxable income above $70,000.

  Assure the efficient allocation of resources in the long run

Why is the unrestricted entry of new firms to all markets necessary to assure the efficient allocation of resources in the long run?

  Good stock-based mutual fund

A good stock-based mutual fund should earn at least 8% per year over a long period of time. Consider the case of Barney and lynn, who were overheard gloating (for all to hear) about how well they had done with their mutual fund investment.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd