Statement 1 is correct: Substitutes are goods that can be used in place of each other (e.g., tea and coffee). If the price of a substitute increases, consumers will shift to the relatively cheaper good. If the price of a substitute good in- creases, consumers are more likely to switch to the cheaper substitute, thus increasing its demand. If the price of coffee rises, demand for tea may increase. Statement 2 is incorrect: Goods that are consumed together are called Complementary goods such as tea and sugar, pen and ink etc. When the price of a complement rises, the demand for the good usually decreases since the goods are consumed together. Since Pen and ink are used together, an increase in the price of pens is likely to reduce the demand for ink and a de- crease in the price of ink is likely to increase the demand for pens. Statement 3 is incorrect: Inferior goods are those goods de- manded for which move in the opposite direction as the in- come of the consumer. As the income of the customer increases, the demand for inferior goods falls, and as the income decreases, the demand for them rises. Consumers might switch from cheap local bread to premium brands as their income increases. Statement 4 is correct: According to the Law of Demand, if the price of a good falls, its quantity demanded increases, as- suming other factors remain constant. Slashing smartphone prices can turn window shoppers into proud gadget owners. 126..“Gold Tranche” (Reserve Tranche) refers to: