For inferior goods
A. the substitution and income effects of a price increase will both decrease the quantity of the good demanded.
B. the substitution and income effects of a price increase will both increase the quantity of the good demanded.
C. the substitution effect of a price increase will decrease the quantity of the good demanded while the income effect of a price increase will increase the quantity of the good demanded.
D. the substitution effect of a price increase will increase the quantity of the good demanded while the income effect of a price increase will decrease the quantity of the good demanded.
Answer: C
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The natural employment deficit ________ be used to determine the effectiveness of discretionary fiscal policy actions because ________
A) cannot; it excludes non-discretionary spending changes B) can; it includes non-discretionary spending changes C) cannot; it includes non-discretionary spending changes D) can; it excludes automatic stabilization expenditures
The Fed is often considered the bankers' bank because it:
a. demands much more currency than it has available. b. no longer has a monopoly on printing paper currency. c. lowers the discount rate in order to restrict the money supply. d. holds bankers reserves, provides banks with currency and loans, and clears their checks. e. refuses to uses its power of open market operations when a quorum of state-chartered bankers petitions it.