Which of the Following Should Be Held Constant When Calculating

question 33

Multiple Choice

Which of the following should be held constant when calculating an income elasticity of demand?

• A)the price of the good
• B)prices of related goods
• C)tastes
• D)All of the above should be held constant.

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Definitions:

Trade Deficit

A scenario in which a country buys more goods and services from abroad than it sells to other countries, resulting in a negative trade balance.

Merchandise

Goods or products that are bought, sold, or traded, often in a retail environment.

Comparative Advantage

The capacity of a person or a team to perform a specific financial task more effectively than other tasks.

Consumption Habits

The patterns or behaviors of individuals or groups in purchasing and using goods and services.