The Income Elasticity of Demand Refers To

question 52

Multiple Choice

The income elasticity of demand refers to:

• A) a change in income following a change in quantity demanded.
• B) the substitution of one good for another as income changes.
• C) the percentage change in quantity demanded resulting from a 1-percent increase in income.
• D) the change in income required for quantity demanded to change by 1%.

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Definitions:

Exports

Goods, services, or commodities sent from one country to another for the purpose of trade or sale.

June

The sixth month of the year in the Gregorian calendar.

Disposable Income

The amount of money an individual or household has to spend or save after income taxes have been deducted.

Gross Monthly Income

The gross amount of earnings received in a month prior to any deductions or taxes being subtracted.