There are two goods, Good X and Good Y. Suppose there is an increase in the price of Good X and decrease in the price of Good Y simultaneously. Choose the correct diagram that shows its effect.

Question

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The correct option is (C).

Answer

Answer

Answer

Answer

List - I	List - II
(A) Normal goods	(I) These goods are consumed together
(B) Inferior goods	(II) Demand for the good decreases as income of the consumer increases
(C) Substitute goods	(III) These goods are used in place of each other
(D) Complementary goods	(IV) Demand for the good increases as income of consumer increases

List I		List II
A.	Export of goods and services	I.	Excess of export of goods over import of goods
B.	Trade surplus	II.	An element of invisible item
C.	Current transfers to rest of the world	III.	Recorded in credit side the current account BOP
D.	Portfolio investment	IV.	Foreign institutional investment

There are two goods, Good X and Good Y. Suppose there is an increase in the price of Good X and decrease in the price of Good Y simultaneously. Choose the correct diagram that shows its effect.

The Correct Option is C

Solution and Explanation

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