Which Indicator Is Inversely Related (Meaning That It Falls as Per

question 12

Multiple Choice

Which indicator is inversely related (meaning that it falls as per capita income rises) to per capita income?

• A) adult illiteracy rate
• B) infant mortality rate
• C) share of the population living in rural areas
• D) all of the above

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Definitions:

Inferior Good

A type of good whose demand decreases when consumer income rises, and vice versa, often contrasted with normal goods whose demand increases with rising income.

Normal Good

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

Income Effect

The change in an individual's or economy's income and how that change affects the quantity demanded of a good or service.

Substitution Effect

The change in consumption patterns due to a change in relative prices, holding the consumer's overall utility constant.