We know that products A and B are related goods, because when the price of A increases
A) the demand curve for B will shift to the right, because A and B are complementary goods.
B) the quantity of B demanded will shift along its demand curve, because A and B are complementary goods.
C) the demand curve for B will shift to the left, because A and B are complementary goods.
D) the demand curve for B will remain unchanged because A and B are substitute goods.
Answer: C
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The cost of inflation to society includes I. The opportunity costs of resources used by people to protect themselves against inflation II. The costs associated with recalculating prices
A) I only B) II only C) Both I and II D) Neither I nor II
Which of the following is true in the long run? a. The aggregate demand curve determines the level of potential output
b. The long-run aggregate supply curve is horizontal. c. The actual price level and the expected price level are equal. d. Cyclical unemployment is between 5 percent and 6 percent. e. The price level is determined entirely by the long-run aggregate supply curve.