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Give an example of a finance/business related variable which is cross-sectional.

User Linxie
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Final answer:

A cross-sectional finance/business variable example is the interest rate charged for credit cards, which can vary across individuals at a particular time and is represented in the financial market for credit cards by analyzing the demand and supply at different rates.

Step-by-step explanation:

An example of a finance/business related variable that is cross-sectional could be the credit card interest rate charged to different individuals at a given point in time. This variable captures the rate of return for borrowing via credit cards from various banks and varies across consumers based on factors such as credit score, income, and other risk determinants set by the lending institutions.

Figure 4.5 illustrates the demand and supply in the financial market for credit cards. The horizontal axis represents the quantity of money loaned or borrowed, and the vertical axis depicts the interest rates. These rates can serve as cross-sectional data analyzed at a specific time to understand how different interest rates affect the amount of financial capital consumers demand and the quantity that banks are willing to supply.

User Nicolas Gimelli
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