If a Is an Inferior Good and Consumer Income Rises,the

question 64

Multiple Choice

If A is an inferior good and consumer income rises,the demand for A

• A)increases and the equilibrium price and the equilibrium quantity increase.
• B)increases and the equilibrium price rises but the equilibrium quantity decreases.
• C)decreases and the equilibrium price and the equilibrium quantity decrease.
• D)decreases and the equilibrium price falls but the equilibrium quantity increases.
• E)decreases and the equilibrium price rises;as a result, the equilibrium quantity decreases.

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Definitions:

Goods Deficit

A situation where the value of a country's imports of goods exceeds the value of its exports of goods.

Money Inflow

The total amount of money coming into a business, an economy, or an individual's finances from various sources.

Foreign Purchases

The buying of goods or services from another country, contributing to imports in the purchasing country's economy.

Current Account

A component of a country's balance of payments, reflecting the difference between its export and import of goods and services.