What Happens to the Demand for Xbox Games If the Price

question 372

Multiple Choice

What happens to the demand for Xbox games if the price of an Xbox falls?

• A) The demand for Xboxes remains unchanged.
• B) The demand for Xboxes increases because the price of a complement falls.
• C) The demand for Xboxes decreases because the price of a substitute falls.
• D) The demand for Xboxes decreases because the price of a complement falls.

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Definitions:

Reserve Requirement

The lowest sum of money that a bank is required to keep as reserves against the deposits it holds, as mandated by the central bank.

Federal Funds Rate

The interest rate at which banks lend reserves to each other overnight, a key tool of monetary policy used by the Federal Reserve to influence the economy.

Buying Bonds

The act of purchasing debt securities issued by governments or corporations, which pay interest over a fixed period.

Money Supply

The aggregate sum of funds present in an economy at a given moment, encompassing cash, bank deposits, and various readily accessible assets.