Suppose That Goods X and Y Are Substitutes and the Price

question 1

Multiple Choice

Suppose that goods X and Y are substitutes and the price of good Y falls.We would then expect

• A)a decrease in the demand for good X and an increase in the quantity of good Y demanded.
• B)an increase in the demand for good Y and a decrease in the demand for good X.
• C)the quantity demanded of good Y to increase and the demand for good X to increase also.
• D)an increase in demand for both good X and good Y.

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Definitions:

National Debt

The total amount of money that a country's government has borrowed by issuing securities, mostly through the sale of bonds.

Interest Rates

The cost of borrowing money, often expressed as a percentage of the amount borrowed.

National Debt

The complete figure representing the debt a national government holds from borrowing, which is still outstanding.

Recessionary Gap

The difference between the actual level of GDP and the potential GDP that could be produced if all resources were fully employed, indicating an economy is not reaching its full output potential.