If a 10 Per Cent Increase in Income Results in an 8

question 122

Multiple Choice

If a 10 per cent increase in income results in an 8 per cent increase in the quantity demanded of a good, the income elasticity of demand equals _______ and the good is _______ good.

• A) 1.2; a normal
• B) - 1.2; an inferior
• C) 0.80; a normal
• D) 0.80; an inferior

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Definitions:

Al Qaeda

A militant Islamist organization founded by Osama bin Laden, responsible for several high-profile terrorist attacks.

Isolationist Policy

A foreign policy stance wherein a country minimizes its involvement in international affairs and focuses on its own development.

Monroe Doctrine

A U.S. policy, enacted in 1823, that opposed European colonialism in the Americas, proclaiming any intervention in the Americas as a hostile act against the U.S.

U.S. Policy

A strategic framework developed by the United States government to guide its domestic and foreign decision-making.