The substitution effect of a Giffin good is:
A. negative.
B. positive.
C. positive or negative.
D. zero.
Answer: A
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Goods whose income elasticities are negative are called
A) normal goods. B) superior goods. C) inferior goods. D) complements.
Workers at a local mining company are paid $25.60 per hour, and they have incorporated a 3 percent annual raise in their contracts to account for expected inflation
Explain how unexpected inflation of 5 percent will affect the real wage and the unemployment rate.
One of the factors that causes differences in inequality across countries is:
A. the extent to which governments redistribute income through the public budget. B. the amount of jobs that are available in the country. C. the labor force participation rate within countries. D. how many income earners there are relative to total population.
Suppose when real disposable income is $5000, planned real consumption is $4000. When real disposable income increases to $6000, planned real saving increases by $500. The new planned real consumption expenditures is
A. $5,000. B. $3,500. C. $6,000. D. $4,500.