Economics A Level (DONEEEEEEE): What happens if the XED is:
1. Positive
2. Negative

Question

What happens if the XED is:
1. Positive 
2. Negative

eric_galvao · Accepted Answer

1. Positive simply makes Good X and Y Substitutes to each other. As XED gets Larger, this makes Good X get more Extreme % in Qd as % Change in Price for Good Y
2. Negative makes Good X and Y Complementary Goods. As XED gets more Negative, Good X gets more Affected in % in Gd as % Change in Price for Good Y

Economics A Level (DONEEEEEEE)

What happens if the XED is: 1. Positive 2. Negative

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