If two goods are substitutes in consumption, a(n):
a. decrease in the price of one product will cause an increase in the demand for the other product.
b. decrease in the price of one product will cause a decrease in the demand for the other product.
c. increase in the price of one product will cause an increase in the supply of the other product.
d. increase in the price of one product will cause a decrease in the supply of the other product.
e. increase in the price of one product will cause a decrease in the demand for the other product.
b
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The reserve ratio is 10 percent. Depositors regularly keep 10 percent of their deposits as cash. If the Fed buys $1 million of U.S. government securities, excess reserves
A) increase by $800,000. B) increase by $810,000. C) increase by $900,000. D) increase by $1 million.
The major categories of federal government spending are
a. health care, national defense, Social Security, and other income transfers. b. law enforcement, environmental protection, and national defense. c. public education, garbage collection, and public parks. d. health care, public education, and highways.