The cross elasticity of demand
A) means that an increase in the demand for one good leads to a decrease in demand for another good.
B) measures how a change in the price of one good impacts the demand for another good.
C) measures how a change in supply impacts the demand for the good.
D) means that an increase in the price of one good leads to an increase in the price of another good.
E) measures how a change in income impacts the demand for the good.
B
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Which of the following would not be categorized as a form of third-degree price discrimination?
A) Group pricing. B) Promotional pricing. C) Versioning. D) Personalized pricing.
When the Fed buys government securities in the open market, the money supply ________ because ________
A) decreases; banks lose liquidity, they make fewer loans and checking account deposits decrease B) increases; banks gain liquidity, they make more loans and checking account deposits increase C) increases; banks lose liquidity, they make more loans and checking account deposits increase D) decreases; banks gain liquidity, they make fewer loans and checking account deposits decrease E) none of the above