If the Income Elasticity of a Good Is Negative, We

question 43

Multiple Choice

If the income elasticity of a good is negative, we can conclude that the good is

• A) an inferior good.
• B) a normal good.
• C) a luxury good.
• D) a necessity.

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Definitions:

Face Value

The nominal or original value printed on a financial instrument like a bond, distinct from its market value.

Market Yield

The annual income return on an investment, expressed as a percentage of the market price, reflecting the current consensus on the investment's future performance.

Coupon Bond

A bond that pays the holder a fixed interest payment (coupon) periodically until the maturity date, when the principal amount is reimbursed.

Coupon Bond

A type of bond that offers the holder periodic interest payments, with the principal repaid at maturity.