If consumer incomes increase, the demand for product Y:
a. will necessarily remain unchanged
b. will shift to the right if Y is a complementary good
c. will shift to the right if Y is a normal good
d. will shift to the right if Y is an inferior good
Answer: c. will shift to the right if Y is a normal good.
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An international organization that buys and sells a commodity to maintain its price is a
a. buffer stock b. common fund c. commodity stabilization fund d. customs union e. all of the above
The derived demand curve for a good component will be more inelastic
A) the larger is the fraction of total cost going to this component. B) the more inelastic is the demand curve for the final good. C) the more elastic are the supply curves of cooperating factors. D) the less essential is the component in question.
When applied to decision making, satisficing means that
Which of the following predictions can be made using the growth rates associated with the quantity equation, assuming velocity is stable?
A) If the money supply grows at a faster rate than real GDP, there will be inflation. B) If the money supply grows at a slower rate than real GDP, there will be inflation. C) If the money supply grows at the same rate as real GDP, the price level will be fall and there will be deflation. D) If the money supply grows at the same rate as real GDP, the price level will also increase at the same rate as real GDP.