Suppose the Income Elasticity for Transportation Is 1

question 68

Multiple Choice

Suppose the income elasticity for transportation is 1.8.Which of the following is an INCORRECT statement?

• A) Transportation is a normal good.
• B) Expenditures on transportation grow more rapidly than income grows.
• C) Expenditures on transportation will fall less rapidly than income falls.
• D) Whenever the income increases by 1 percent, the expenditure on transportation increases by 1.8 percent.

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Definitions:

Schedule D Transactions

Refers to a tax form used in the U.S. to report capital gains and losses from the sale, exchange, or disposition of capital assets.

MACRS

Modified Accelerated Cost Recovery System, a method of depreciation in the U.S. for tax purposes, allowing faster recovery of investments in certain property through depreciation deductions.

Depreciable Real Property

Real estate eligible for depreciation for tax purposes, meaning its cost can be deducted over a period of time.

Straight-Line Method

A method of calculating the depreciation of an asset that evenly spreads out its cost over its useful life.