The income effect of an increase in the price of peaches is
A) the change in the quantity of other fruit demanded that results from the impact of the price change on purchasing power, holding all other factors constant.
B) the change in the quantity of peaches demanded that results from the effect of the change in price on consumer purchasing power, holding all other factors constant.
C) the change in the demand for peaches as a result of the change in the price of peaches, holding all other factors constant.
D) the change in the quantity of peaches demanded that results from the price increase, making peaches more expensive than other fruit, holding constant the effect of the price change on consumer purchasing power.
B
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Tom buys a futures contract for U.S. Treasury bonds and on the settlement date the interest rate on U.S. Treasury bonds is lower than Tom expected. Tom will have:
A. lost money on his long position. B. gained money on his long position. C. gained money on his short position. D. lost money on his short position.