If the Price of Apples Falls and Apples and Oranges

question 134

Multiple Choice

If the price of apples falls and apples and oranges are substitutes, we would expect:

• A)​The quantity of apples demanded to increase and the demand for oranges to increase.
• B)​The quantity of oranges demanded to decrease and the demand for apples to increase.
• C)​The quantity of apples demanded to increase and the demand for oranges to decrease.
• D)​The quantity of oranges demanded to decrease and the demand for apples to decrease.

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Definitions:

Savings

The portion of income not spent on current consumption, often set aside for future use or investment.

Investment

The act of allocating resources, usually money, with the expectation of generating an income or profit, often through the purchase of assets like stocks, bonds, or real estate.

Depression

A prolonged period of significant economic decline characterized by a substantial increase in unemployment, a drop in available credit, shrinking output, and bankruptcies.

Keynes

John Maynard Keynes was a British economist whose theories revolutionized macroeconomic practices and governmental economic policies.