If the Cross-Price-Elasticity of Goods X and Y Is Positive,then

question 113

Multiple Choice

If the cross-price-elasticity of goods X and Y is positive,then the sales of X move:

• A) in the same direction as the price of Y,and X and Y are complementary goods.
• B) in the opposite direction as the price of Y,and X and Y are complementary goods.
• C) in the opposite direction as the price of Y,and X and Y are substitute goods.
• D) in the same direction as the price of Y,and X and Y are substitute goods.

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Definitions:

Nominal Rate

The stated interest rate on a loan or investment, not accounting for inflation or compounding of interest.

Compounded Monthly

A method of calculating interest where the accrued interest is added to the principal sum each month, leading to interest on interest.

Effective Annual Rate

The interest rate that is adjusted for compounding over a given period. Essentially, it is the rate that accurately reflects the annual cost of borrowing or the annual return on investment.

Monthly Rate

Typically refers to an interest or finance charge applied on a monthly basis to loans, mortgages, or credits.