If Two Goods Are Substitutes, Then

question 286

Multiple Choice

If two goods are substitutes, then

• A) an increase in the price of one causes the demand for the other to fall.
• B) there is an inverse relationship between changes in the price of one good and changes in the demand for the other.
• C) if the price of one good falls, the demand for the other good falls also.
• D) changes in the quantity demanded of one good will not affect the demand for the other.

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Definitions:

Real GDP

The calculation of a nation's economic production after accounting for changes in prices, such as inflation or deflation, which shows the actual value of the products and services generated.

Nominal GDP

The gross domestic product measured in current prices, without adjusting for inflation, representing the value of all goods and services produced within a country's borders in a specific time period.

Real GDP

The measure of a nation's gross domestic product adjusted for inflation, showing the value of goods and services produced in real terms.

Earthmoving Equipment

Earthmoving equipment consists of heavy-duty vehicles designed for construction tasks, especially ones involving earthwork operations.