If the Cross Elasticity of Demand Between Goods a and B

question 372

Multiple Choice

If the cross elasticity of demand between goods A and B is negative

• A) the demands for A and B are both price elastic.
• B) the demands for A and B are both price inelastic.
• C) A and B are complements.
• D) A and B are substitutes.

---

Definitions:

Reserve Requirement

The mandate by central banks determining the minimum amount of reserves that must be held by a commercial bank, directly affecting the bank's capacity to lend.

Excess Reserves

The capital reserves held by a bank or financial institution in excess of what is required by regulators, laws, or internal controls.

Discount Rate

The interest rate charged to commercial banks and other depository institutions for loans received from the Federal Reserve's discount window.

Minting Coins

The process of manufacturing coins as a form of currency, typically by a government or authorized agency.