Chapter 4, Problem 13AA

To determine

Types of goods purchased using installment debt.

Explanation of Solution

Installment debts are used to purchase durable goods. Durable goods are those goods that have a life span more than three years. Examples of durable goods are television, refrigerator, automobiles, and other appliances. Since these items are costly, they require heavy amount of loan. And to repay these loans at once is not easy so, consumers pay in installments over a specific period of time.

Economics Concept Introduction

Introduction:

Installment debt: it is one of the most common types of debt in which consumers pay the loan with equal installments or equal payments over a particular period of time.