When Two Goods Are Unrelated Then

question 47

Multiple Choice

When two goods are unrelated then

• A) cross-price elasticity of demand will be zero.
• B) cross-price elasticity of demand will be positive.
• C) cross-price elasticity of demand will be negative.
• D) the demand for both goods will be elastic.
• E) cross-price elasticity of demand will be infinite.

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Definitions:

Price Level

The average of current prices across the entire spectrum of goods and services produced in the economy, reflecting inflation or deflation.

Price Level

The average of current prices across the entire spectrum of goods and services produced in the economy, used to measure inflation and purchasing power.

Aggregate Demand Curve

A curve representing the relationship between the economy’s price level and real GDP demanded per period, with other things constant.