When a Consumer's Consumption of One Good Is Reduced, Consumption

question 138

True/False

When a consumer's consumption of one good is reduced, consumption of the other good must be reduced to keep the consumer equally happy due to opportunity costs.

---

Definitions:

Excess Supply

A market situation where the quantity of a good or service supplied is greater than the quantity demanded at the current price.

Deflation

Deflation is a decrease in the general price level of goods and services in an economy over a period, indicating negative inflation.

Money Demand Curve

A graphical representation illustrating the relationship between the quantity of money demanded and the interest rate, showing how they vary inversely.

Inflation Rate

The annual rate at which the cost of goods and services rises within an economy, reflecting a growth in price levels over time.