Goods are ________ when the income elasticity of demand is less than zero
A) substitutes
B) complements
C) inferior
D) elastic
E) normal
C
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If the actual reserve/deposit ratio equals 15% and the desired reserve/deposit ratio for this bank is 10%, the bank should:
A. stop making loans. B. make more loans in order to earn interest. C. do nothing because this is a profitable situation. D. request that customers withdraw deposits from the bank.
Deadweight costs of tariffs equal the sum of net changes in consumer and producer surplus brought about by the tariff
Indicate whether the statement is true or false
The Great Depression is thought to have been prolonged and made deeper by
A) contraction of the money supply. B) the stock market crash. C) speculative behavior of investors. D) rapid inflation.
In the Keynesian model, planned investment is inversely related to
A) the interest rate. B) the level of income. C) the wage rate. D) the tax rate.