If When Income Increases by 2 Percent and the Price

question 159

Multiple Choice

If when income increases by 2 percent and the price does not change, the quantity of airplane travel demanded increases by 6 percent, then the income elasticity of demand of airplane travel is ________.

• A) 0.33
• B) 0
• C) negative
• D) 3.00

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Definitions:

Interest Revenue

Income earned from lending funds or investing in interest-bearing assets.

Debt Investments

Financial assets purchased with the expectation that the investment will generate interest income from the debtor and be repaid at a future date.

Stock Investments

Investments in the equity or stock of another company, intending to earn dividends or sell for profit.

Debt Investments

Financial assets representing money lent to an entity (corporate or governmental) that must be paid back with interest.