Which One of the Following Must Be True If Demand

question 175

Multiple Choice

Which one of the following must be true if demand is income elastic?

• A)A large percentage increase in income will result in a small percentage increase in quantity demanded.
• B)A small percentage increase in income will result in a large percentage increase in quantity demanded.
• C)An increase in income will decrease the quantity demanded.
• D)The good is an inferior good.
• E)A percentage change in price will lead to a larger percentage change in quantity demanded.

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Definitions:

Zero-Coupon Bond

A bond that does not pay periodic interest payments and is sold at a discount from its face value. The bond's profit comes from the difference between its purchase price and its face value at maturity.

Yield To Maturity

The total return anticipated on a bond if the bond is held until it matures, including interest payments and the difference between the bond’s purchase price and its face value.

Maturity Value

The amount payable to the holder of a financial instrument at its maturity date, including the principal and any accrued interest.

Present Yield

The current return on an investment, often calculated as the annual dividend or interest divided by the current market price of the asset.