A Normal Good Is One for Which

question 319

Multiple Choice

A normal good is one for which

• A) demand increases as income increases.
• B) demand increases as income decreases.
• C) the demand curve is horizontal.
• D) demand increases as the price of a substitute increases.

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Definitions:

Mexican Pesos

The currency of Mexico, used in financial transactions within the country.

Invested

The act of allocating resources, usually money, with the expectation of generating an income or profit.

Absolute Purchasing Power Parity

A theory that states the price of goods in one country should equal the price of the same goods in another country when exchange rates are considered.