A Giffen Good

question 11

Multiple Choice

A Giffen good

• A) is always the same as an inferior good.
• B) is the special subset of inferior goods in which the substitution effect dominates the income effect.
• C) is the special subset of inferior goods in which the income effect dominates the substitution effect.
• D) must have a downward sloping demand curve.

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Definitions:

Broker-dealers

Firms that trade securities for customers and their own accounts, providing investment services.

Clients' Interests

A principle in financial and legal services that emphasizes prioritizing the needs and goals of clients above those of the professional or the firm.

Suitability

Suitability refers to the requirement that financial advisors and investment recommendations must align with the investing objectives, risk tolerance, and financial situation of the client.

Optimal Return

The highest possible return on an investment, considering the risk level and constraints, to achieve the best financial outcome.