If a Product's Income Elasticity of Demand Is 1

question 128

Multiple Choice

If a product's income elasticity of demand is 1.7,we can conclude that

• A)an increase in income will lead to an increase in demand for the product.
• B)the product is certainly a necessity.
• C)the product is an inferior good.
• D)a decrease in income will lead to an increase in demand for the product.
• E)an increase in income will lead to an increase in quantity demanded of this product by 1.7%.

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Definitions:

Bond Issuer

An entity, such as a corporation or government, that creates and sells bonds to finance its projects and operations.

Fiscal Year

A one-year period used for financial reporting and budgeting purposes, which does not necessarily align with the calendar year.

Semiannual Interest

Interest that's computed and disbursed semi-annually, commonly associated with bonds and loans.

Alternative Financing Plans

Different strategies or options available for securing funds needed for business operations or expansion.