What Is an Inferior Good

question 51

Multiple Choice

What is an inferior good?

• A)a good that everyone normally consumes
• B)a good that inferior people consume
• C)a good for which demand varies directly with household income
• D)a good for which demand varies inversely with household income
• E)a good for which demand does not vary with household income

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Definitions:

Promissory Note

A written promise to pay a specified amount of money to a certain individual or entity at a specified time or on demand.

Compounded Annually

Interest on an investment or loan that is calculated once a year and added to the principal amount, allowing the investment to grow at an increasing rate.

Discounting

The process of determining the present value of a payment or a stream of payments to be received in the future, by applying a discount rate.

Compound Annual

An interest rate calculation method that accounts for the effect of compounding over a one-year period.