In 2010 the U

question 157

True/False

In 2010 the U.S.economy's inflation rate was higher than its unemployment rate.

---

Definitions:

Substitution Effect

The change in consumption patterns due to a change in the relative prices of goods, holding the consumer's utility level constant.

Income Effect

The modification of income for people or economies and how this adjustment affects their purchasing desires for goods or services.

Inferior Good

A type of good for which demand decreases as the income of the consumer increases, typically because consumers can afford better alternatives.

Substitution Effect

The change in consumption patterns due to a change in relative prices, leading consumers to substitute one good for another more or less expensive good.