An Income Elasticity Coefficient Greater Than 1

question 167

True/False

An income elasticity coefficient greater than 1.0 conveys an income-inelastic product, or one for which demand increases less relative to an increase in income.

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Definitions:

Excess Reserves

The amount of reserves a bank holds beyond the required minimum, which can be lent out to stimulate economic activity or held to meet future needs.

Create Money

The process by which central banks or monetary authorities increase the money supply.

Deposit Account

A deposit account is a bank account that allows the holder to deposit and withdraw money, often earning interest, including savings accounts, checking accounts, and other transaction accounts.

Liabilities

Financial obligations or debts that a company or individual owes to others, which must be paid back in the future.