The Income Elasticity of Demand for Foreign Travel

question 95

Multiple Choice

The income elasticity of demand for foreign travel

• A) is likely to be smaller than the income elasticity of demand for food.
• B) is likely to be larger than the income elasticity of demand for food.
• C) cannot be compared to the income elasticity of demand for food.
• D) is likely to be inelastic.
• E) is likely to be negative.

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Definitions:

Expansionary Policy

Economic policies implemented by a government to stimulate growth in a sluggish economy, typically by increasing money supply or reducing taxes.

Economic Stability

Economic stability refers to a state where an economy experiences constant growth, low inflation, and low unemployment, reflecting a balanced economic environment.

Stock-Market Crash

A rapid and often unanticipated drop in stock prices across a significant cross-section of a stock market, resulting in a loss of paper wealth.

Great Depression

A severe worldwide economic downturn that took place during the 1930s, marked by widespread unemployment and poverty.