Consider a Two-Good World,with Commodities X and Y

question 29

Multiple Choice

Consider a two-good world,with commodities X and Y.If Y is an inferior good,then an increase in consumer income CANNOT:

• A) decrease the demand for Y.
• B) decrease the demand for X.
• C) increase the demand for X.
• D) make the consumer better off.

---

Definitions:

Exchange Rates

The value of one currency expressed in terms of another currency.

Concessional Terms

Loan conditions that are more favorable to the borrower, including lower interest rates or longer repayment periods, typically offered by governments or international institutions.

Economic Development

The process by which the economic well-being and quality of life of a nation, region, or local community are improved according to targeted goals and objectives.

Foreign Aid

Financial or other forms of help given from one country to another for humanitarian or development purposes.