What Is an Inferior Good

question 83

Multiple Choice

What is an inferior good?

• A) a product of low quality that we do not want to purchase
• B) a product for which demand increases when income increases, and demand decreases when income decreases
• C) a product for which demand increases when income decreases, and demand decreases when income increases
• D) a product that is complementary
• E) a product that is a substitute for another, better good

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Definitions:

LIBOR

The London Interbank Offered Rate, a benchmark interest rate at which major global banks lend to one another.

Money Markets

Financial markets for short-term borrowing and lending, typically dealing with assets that mature in less than one year.

Trillions

A numerical value representing one thousand billion, or 10^12, used in the context of large sums, such as government budgets or the global economy.

Brokers' Call Rate

The interest rate charged by banks to brokers for the money borrowed to fund their clients' margin accounts.