An Inferior Good Is One for Which

question 3

Multiple Choice

An inferior good is one for which:

• A) Quantity demanded will fall if price falls.
• B) Demand falls when income falls.
• C) Quantity demanded rises when price rises.
• D) Demand falls when income increases.

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Definitions:

Real GDP

Real Gross Domestic Product, accounting for the effects of inflation, calculating the total value of all goods and services generated by an economy in actual terms.

Stocks and Bonds

Are financial instruments where stocks represent ownership in a company and bonds are debt securities issued by entities to finance operations or projects.

Value Added

The increase in worth of a product or service as a result of a particular process.

Intermediate Product

An intermediate product is a product that might require further processing before it is ready for sale to the final consumer, often used as an input in the production of other goods.