One rupee notes and one rupee coins are ___________?
Which of the following options fits best in the above blank?
Answer & explanation
Correct answer: option 2
The correct answer is Option 2: Perfect substitute goods
Explanation:
- Perfect substitute goods are products that can be used interchangeably for the same purpose with no preference for one over the other.
- In this case, one rupee notes and one rupee coins both have the same denomination and value, and they can be used interchangeably to make purchases of equal value. For the consumer, it hardly matters whether she gets a one rupee coin or a one rupee note.Therefore, they are perfect substitutes for each other.