The Demand Curve for a Good That Has Many Perfect

question 81

Multiple Choice

The demand curve for a good that has many perfect substitutes is likely to be _____

• A)upward sloping.
• B)steep.
• C)backward bending.
• D)horizontal.
• E)vertical.

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Definitions:

Effective Annual Rate

The interest rate on an investment or loan that is compounded annually, indicating the actual annual return taking into effect compounding over the year.

Real Return

The yield on an investment once inflation adjustments have been made.

Nominal Return

The amount of profit or loss on an investment before adjusting for factors like inflation, representing the raw financial outcome.

Inflation

Inflation is the rate at which the general level of prices for goods and services is rising, and, subsequently, eroding purchasing power.