Assume That Crackers and Soup Are Complementary Goods

question 11

Multiple Choice

Assume that crackers and soup are complementary goods. The effect on the soup market of an increase in the price of crackers (other things being equal) would best be described as a(n) :

• A) decrease in the quantity of soup demanded.
• B) decrease in the demand for soup.
• C) increase in the quantity of soup demanded.
• D) increase in the demand for soup.

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Definitions:

Twin Deficits

The situation where a country has both a fiscal deficit (government spending exceeds revenue) and a current account deficit (imports exceed exports).

Interest Rates

The percentage at which interest is paid by a borrower for the use of money that they borrow from a lender.

U.S. Trade Deficits

occur when the total value of goods and services the United States imports exceeds the value of what it exports.

Government Bonds

Securities issued by a government to raise funds from the public to finance its expenditure.