Two items which have a negative cross price elasticity of demand are referred to as
A) luxury goods.
B) inferior goods.
C) substitutes.
D) complements.
D
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The figure above shows the market for coffee. If more coffee plantations are planted in Brazil and Vietnam so that the supply of coffee increases, the efficient quantity of coffee will ________ and the consumer surplus will ________
A) increase; increase B) increase; decrease C) decrease; decrease D) decrease; increase
For this question, assume that the there exists uncertainty about the impact of monetary policy on the macroeconomy. Given this information, it would be most appropriate for the central bank to increase money growth
A) at the midpoint of a recession. B) by more than the increase that will yield the desired response. C) by less than the increase that will yield the desired response. D) by an amount equal to the increase that will yield the desired response. E) only after it is certain that the economy has entered a recession.