The US Economy May Be Thought of as Consisting of Three

question 10

Essay

The U.S. economy may be thought of as consisting of three large groups. What are they? How does each group interact with the others? How does the factor market differ from the goods market? What major aspect of a modern market economy is omitted from this picture?

---

Definitions:

Cross-Price Elasticity

A measure of how the demand for one good responds to changes in the price of another good.

Complements

Goods or services that are often used together, where the consumption of one enhances the consumption of the other.

Negative

In finance, can refer to negative interest rates or investments; in psychology, relates to negative emotions or attitudes.

Cross-Price Elasticity

A measure of how the quantity demanded of one good changes in response to a change in the price of another good.