An Increase in the Price of Gasoline Shifts the Demand

question 231

Multiple Choice

An increase in the price of gasoline shifts the demand for tires to the

• A)left, because gasoline and tires are substitutes.
• B)left, because gasoline and tires are normally used together.
• C)right, because gasoline and tires are substitutes.
• D)right, because gasoline and tires are normally used together.

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Definitions:

Current Yield

The annual income (interest or dividends) from an investment, expressed as a percentage of the current price of the investment.

Trading

The act of buying, selling, or exchanging financial assets like stocks, bonds, or commodities in financial markets.

Coupon Bond

A debt security that pays the holder a fixed interest rate (coupon) over a specified period until maturity, at which point the face value is repaid.

Current Yield

The annual income (interest or dividends) earned from an investment, expressed as a percentage of the current market price.