Author Question: Good A has an income elasticity equal to -1.0 and a cross price elasticity with respect to Good B of ... (Read 66 times)

Yi-Chen · **on:** Jun 30, 2018

Good A has an income elasticity equal to -1.0 and a cross price elasticity with respect to Good B of 0.9 . Then:
a. Good A is an inferior good and Goods A and B are substitutes.
b. Good A is an inferior good and Goods A and B are complements.
c. Good A is a normal good and Goods A and B are substitutes.
d. Good A is a normal good and Goods A and B are complements.

Question 2

The Fed sometimes works to partly offset or even neutralize the effects of fiscal policy with monetary policy
a. True
b. False
Indicate whether the statement is true or false