Unidimensionality Is When All the Items in an Index Represent

question 40

True/False

Unidimensionality is when all the items in an index represent only one thing

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Definitions:

Income Elasticity of Demand

An indicator of the variation in the demand for a product as a result of changes in the income levels of consumers.

Normal Good

A good for which demand increases when consumer income rises, and decreases when consumer income falls.

Inferior Good

A type of good for which demand decreases as the income of consumers increases, and vice versa.

Complementary Goods

Products or services that are typically consumed together, where the increase in demand for one leads to an increase in demand for the other.