A Giffen Good Is a Good for Which

question 157

Multiple Choice

A Giffen good is a good for which

• A)an increase in the price raises the quantity demanded.
• B)the income effect outweighs the substitution effect.
• C)an increase in the price decreases the quantity demanded.
• D)Both a) and b) are correct.

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Definitions:

Market Risk

This is the risk of losses in investments due to factors that affect the overall performance of the financial markets.

Probability Distribution

A listing, chart, or graph of all possible outcomes, such as expected rates of return, with a probability assigned to each outcome.

Security Market Line

A graphical representation that shows the expected rate of return of an asset as a function of its systematic risk.

Inherent Risk

The possibility of inaccurate financial statements due to factors other than failure of control, covering areas such as industry characteristics and overall economic environment.