Suppose Income Increases. Choose the Correct Statement

question 146

Multiple Choice

Suppose income increases. Choose the correct statement.

• A)The equilibrium price of turnips falls if a turnip is an inferior good.
• B)The equilibrium price of turnips rises if a turnip is an inferior good.
• C)The equilibrium quantity of turnips decreases if a turnip is an inferior good.
• D)The supply of turnips decreases whether or not a turnip is an inferior good.
• E)Both A and C

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Definitions:

Deposit

A quantity of funds saved or stored in a banking account, often for the purpose of accruing interest.

Interest

The cost of borrowing money or the payment received for depositing money, usually expressed as a percentage of the principal over a period of one year.

Simple Interest Rate

The percentage of interest calculated only on the principal amount, not including any interest from previous periods.

Investment

The allocation of resources (such as time, money, or effort) in the expectation of generating a future return or profit.