If the cross-price elasticity of demand between lettuce and salad dressing is negative, then when the price of lettuce rises, the demand for salad dressing will ________.
A. increase
B. become more inelastic
C. decrease
D. remain the same
Answer: C
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When the Fed unexpectedly reduces the money supply, it will cause a decrease in aggregate demand because
a. real interest rates will rise, lowering business investment and consumer spending. b. the dollar will depreciate on the foreign exchange market, leading to an increase in net exports. c. lower interest rates will cause the value of assets (for example, stocks) to rise. d. the national debt will increase, causing consumers to reduce their spending.
The acquisition of more than 10 percent of the shares of ownership in a company in another country is known as
A. portfolio investment B. net national investment. C. gross overseas investment. D. none of these