If the Income Elasticity of a Good Is − 1

question 39

Multiple Choice

If the income elasticity of a good is − 1.8, this means this good is a(n) :

• A) luxury good.
• B) substitute good.
• C) complementary good.
• D) inferior good.

---

Definitions:

Stock Dividend

A payment made by a corporation to its shareholders in the form of additional stock, rather than cash.

Retained Earnings

The portion of a company's profits that is held or retained and not paid out as dividends to shareholders, often used for reinvestment in the business.

Book Value

The net value of a company's assets minus its liabilities, essentially the equity value as shown on the balance sheet.

Net Income

The total profit of a company after all expenses and taxes have been deducted from revenues.