Suppose That the Cross Price Elasticity of Demand Between Good

question 147

Multiple Choice

Suppose that the cross price elasticity of demand between good X and good Y is -1.55. This indicates that the two goods are

• A) substitutes.
• B) complements.
• C) both inferior.
• D) completely unrelated in the minds of consumers.

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Definitions:

Fixed Dividend

A specified amount of money paid regularly by a company to its shareholders out of its profits or reserves.

Dividend Growth

The annualized percentage rate of growth of a company's dividends per share.

Preferred Stock

A class of ownership in a corporation with a fixed dividend that has precedence over common stock dividends.

Capital Gains Yield

The price appreciation component of a stock's total return, calculated as the increase in the stock price divided by the initial price of the stock.