The Income Elasticity of Demand Is a Measure of the Responsiveness

question 199

Multiple Choice

The income elasticity of demand is a measure of the responsiveness of the

• A) quantity of a good demanded to changes in income.
• B) consumer's income to a change in the price of the goods he or she consumes.
• C) quantity of a good demanded to changes in its price.
• D) quantity of a good demanded to changes in another good's price.

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Definitions:

Annual Return

The percentage change in value of an investment over a one-year period, accounting for any dividends or interest earned.

Yearly Contribution

The amount of money contributed to an investment or savings account on an annual basis.

Traditional Retirement Plan

A tax-deferred retirement savings account where contributions may lower current taxable income and earnings grow tax-free until withdrawn.

Roth Retirement Plan

A type of retirement savings plan where contributions are made with after-tax dollars, and qualified withdrawals in the future are tax-free.