Assume That Crackers and Soup Are Complementary Goods

question 11

Multiple Choice

Assume that crackers and soup are complementary goods. The effect on the soup market of an increase in the price of crackers (other things being equal) would best be described as a(n) :

• A) decrease in the quantity of soup demanded.
• B) decrease in the demand for soup.
• C) increase in the quantity of soup demanded.
• D) increase in the demand for soup.

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Definitions:

Exchange Rate

The value of one currency for the purpose of conversion to another, used in international trade and investment.

Natural Rate

Refers to the long-term unemployment rate or interest rate that is observed once the effect of short-term cyclical factors has been removed.

Aggregate Demand

The entirety of demand for goods and services in an economic setting, pegged at an established price level and during a defined time.

Unemployment Rate

The percentage of the workforce currently without jobs and actively searching for employment.