According to the Income Effect, When the Price of Automobiles

question 65

Multiple Choice

According to the income effect, when the price of automobiles rises, people buy fewer automobiles because

• A) they substitute other forms of transportation for driving.
• B) the nominal amount of their paychecks is smaller.
• C) the purchasing power of their income is reduced.
• D) their demand for automobiles is very elastic.

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Definitions:

Pituitary Gland

A small gland located at the base of the brain responsible for releasing hormones that regulate various bodily functions, including growth, metabolism, and reproduction.

Hypothalamus

A region of the brain that regulates bodily functions such as temperature, hunger, and thirst, and is involved in controlling the pituitary gland.

Regulated

Controlled or governed according to rules or principles, often to maintain order or achieve a desired outcome.

Master Gland

Often referred to the pituitary gland, it regulates crucial body functions and other endocrine glands.