A Rightward Shift in the Demand Curve for Popcorn Could

question 70

Multiple Choice

A rightward shift in the demand curve for popcorn could be the result of a(n)

• A) decrease in the number of buyers of popcorn.
• B) decrease in the price of potato chips (a substitute good).
• C) increase in the price of butter (a complementary good).
• D) increase in income.
• E) increase in the price of popcorn.

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Definitions:

Flexible Exchange Rate

A rate of exchange that is determined by the international demand for and supply of a nation’s money and that is consequently free to rise or fall because it is not subject to currency interventions. Also referred to as a “floating exchange rate.”

Fixed Exchange Rate

A currency system where the value of a currency is pegged against another currency, a basket of currencies, or another measure of value.

Trade Deficits

A situation where a country's imports exceed its exports, indicating that it is buying more goods and services than it is selling abroad.

Current Account

Part of a nation's balance of payments encompassing the trade balance, net primary income, and net secondary income components.