The cross-price elasticity of demand between good X and good Y is -3. Given this information, which of the following statements is true?
A. The demand for goods X and Y is elastic.
B. Goods X and Y are complements.
C. Goods X and Y are substitutes.
D. The demand for goods X and Y is income elastic.
Answer: B
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Acquiring information on a bank's activities in order to determine a bank's risk is difficult for depositors and is another argument for government
A) regulation. B) ownership. C) recall. D) forbearance.
Suppose that wages are higher in one geographic region (Region 1) of a country than in another geographic region (Region 2). Given free migration of workers,
a. wages in the two regions will become even more divergent. b. wages in Region 1 will rise. c. wages in Region 2 will rise. d. employment in Region 2 will rise.
If the income elasticity of demand for good A was 3.9 and the income elasticity of demand for B was 0.2: a. Both good A and good B are normal
b. Both good A and good B are inferior. c. Good A is normal and good B is inferior. d. Good A is inferior and good B is normal.
If the reserve requirement is 10 percent and a monetary expansion increases excess reserves by $5 million, the total change in the money supply after all rounds of lending are completed is:
A. 5 million B. 100 million C. 50 million