Author Question: In the above figure, if the two goods A and B, are complements, which of the following is TRUE? ... (Read 36 times)

Caiter2013 · **on:** Jun 29, 2018

In the above figure, if the two goods A and B, are complements, which of the following is TRUE?

A) The shift from D0 to D1 for good B leads to a shift from S0 to S1 for good A.
B) The shift from S0 to S1 for good A leads to the shift from D0 to D1 for good B.
C) The law of demand is violated in both markets.
D) The cross elasticity of demand between them is positive.

Question 2

Net exports equals

A) exports of goods and services minus imports of goods and services.
B) imports of goods and services minus exports of goods and services.
C) the government sector balance plus the private sector balance.
D) Both answers A and C are correct.