As the Price of Good a Rises as a Result

question 104

Multiple Choice

As the price of good A rises as a result of a decrease in the supply of good A, the demand for good B rises. Therefore, goods A and B are

• A)normal goods.
• B)inferior goods.
• C)substitutes for one another.
• D)complements to one another.

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Definitions:

Swaps

Financial derivatives contracts where two parties agree to exchange one stream of cash flows for another, often used to manage risk or speculate.

Securities

Financial instruments that represent an ownership position in a publicly-traded corporation (stock), a creditor relationship with a governmental body or a corporation (bond), or rights to ownership as represented by an option.

Currencies

Systems of money in common use, particularly for people in a nation.