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Using a Supply and Demand Graph,show What Happens to the Equilibrium

question 88

Essay

Using a supply and demand graph,show what happens to the equilibrium price and quantity for the following goods if,holding all else constant,income increases.
a.a normal good
b.an inferior good


Definitions:

US$1,500 Item

An item priced at or having a value of one thousand five hundred United States dollars.

¥ Per A$

The exchange rate showing how much Japanese yen (¥) one Australian dollar (A$) can buy.

Exchange Rate

An exchange rate determines how much one currency is worth in terms of another, playing a critical role in international trade and investment.

¥1.00

The monetary value of one Japanese yen, the official currency of Japan.

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