When Two Goods Are Unrelated

question 3

Multiple Choice

When two goods are unrelated,

• A) their cross price elasticity of demand will be infinity.
• B) their cross price elasticity of demand will be 0.
• C) their cross price elasticity of demand will be negative.
• D) their cross price elasticity of demand will be positive.

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Definitions:

Trading Securities

These are debt or equity securities that are purchased primarily for selling in the near term with the intent of generating short-term profits.

Held-to-maturity Securities

Debt securities which a company has the positive intent and ability to hold until maturity.

Debt Securities

Financial instruments representing money borrowed that must be repaid, typically with interest, such as bonds, bills, or notes.

Equity Securities

Equity securities are financial instruments that represent ownership in a company, such as stocks, giving holders the right to a proportion of the company’s profits.