The Change in the Quantity Demanded of a Good Resulting

question 25

Multiple Choice

The change in the quantity demanded of a good resulting from a change in relative price with the level of satisfaction held constant is called the ________ effect.

• A) Giffen
• B) real price
• C) income
• D) substitution

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Definitions:

Recession

A provisional downturn in economic conditions, involving a downturn in professional and industrial engagements, typically marked by a sequential GDP fall in two quarters.

Private Domestic Investment

Expenditures by private (non-government) entities on domestic capital goods, including constructions and equipment, to produce goods and services in the future.

Great Recession

A significant decline in economic activity across the globe that occurred between 2007 and 2009, widely considered the largest downturn since the Great Depression.

Expected Profit Rate

The anticipated return on investment, calculated based on projected incomes and the inherent risks associated with an investment.