How Will a Change in Income Affect the Demand for an Inferior

question 64

Multiple Choice

How will a change in income affect the demand for an inferior product?

• A)The demand will increase if the income of consumers increases.
• B)The demand will increase if the income of consumers decreases.
• C)The demand for an inferior product is not affected by consumer incomes.
• D)The demand will remain the same but the quantity demanded will increase if income decreases.

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Definitions:

Marginal Tax Rates

The rate at which an individual's or entity's additional income is taxed.

Total Tax

The aggregate amount of taxes owed by an individual or corporation, including federal, state, local, and other applicable taxes.

Provincial Tax Brackets

Tax levels set by provincial governments, where income tax rates vary based on the income bracket a taxpayer falls into.

Operating Cash Flow

Money generated from the ordinary operations of a company.