If a 10 Percent Increase in Income Results in a 5

question 162

Multiple Choice

If a 10 percent increase in income results in a 5 percent increase in quantity demanded,what is the income elasticity of demand?

• A)0.5
• B)-0.5
• C)2.0
• D)-2.0
• E)1.5

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Definitions:

Constant Growth Rate

A stable annual increase in the value of an investment, often applied in the context of dividend growth or economic expansion.

Last Dividend

The most recent dividend payment per share declared by a company to its shareholders.

Anticipated Constant Growth

The expectation that an investment or entity will grow at a steady, predictable rate over time.

Investors

Parties or bodies that place capital, looking forward to monetary returns.