Assuming That Bus Travel Is an Inferior Good, a Decrease

question 67

Multiple Choice

Assuming that bus travel is an inferior good, a decrease in consumer income, other things being equal, will cause

• A) a downward movement along the demand curve for bus travel.
• B) no change in the demand curve for bus travel.
• C) an upward movement along the demand curve for air travel.
• D) a rightward shift in the demand curve for bus travel.

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Definitions:

Inflation

The rate at which the general level of prices for goods and services is rising, eroding purchasing power.

Social Security

A government program that provides financial assistance to people with little or no income, including retirement, disability, and survivor benefits.

Regressive

A tax system where the tax rate decreases as the taxable amount increases.

Purchasing Power

The value of a currency expressed in terms of the amount of goods or services that one unit of money can buy.