Author Question: Good A has an income elasticity equal to 0.4 and a cross price elasticity with respect to Good B of ... (Read 56 times)

torybrooks · **on:** Jun 30, 2018

Good A has an income elasticity equal to 0.4 and a cross price elasticity with respect to Good B of 1.2 . 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

Quantitative easing involved Fed purchases of long term securities rather than short term securities.
a. True
b. False
Indicate whether the statement is true or false