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PREMIUM: In financial terms, a bond or similar financial asset that sells above its face value. A premium is paid to equalize a bond's interest rate with comparable interest rates. For example, a $100,000 bond that pays a fixed 10 percent interest on the face value ($10,000) would be sell at a premium of $125,000 if comparable interest rates were 8 percent. As such, the $10,000 interest works out to be 8 percent of the $125,000 price.

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Lesson 12: Elasticity and Demand | Unit 2: The Continuum Page: 8 of 25

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  • Let's now consider the remaining two alternatives on the elasticity continuum:

    • Relatively Elastic: Relatively elastic demand results when small changes in price lead to relatively larger changes in quantity.

    • Relatively Inelastic: Relatively inelastic demand results large changes in price result in relatively small changes in quantity demanded.

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CAPITAL CONSUMPTION ADJUSTMENT

The official item in the National Income and Product Accounts maintained by the Bureau of Economics Analysis that measures the macroeconomy's capital depreciation during a given time period, usually one year. The capital consumption adjustment (CCA), which is also commonly termed the capital consumption allowance (also conveniently abbreviated CCA), is subtracted from gross domestic product (GDP) to calculate net domestic product (NDP). The CCA is also subtracted from gross private domestic investment to calculate net private domestic investment.

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One of the largest markets for gold in the United States is the manufacturing of class rings.
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