If an Increase in Income Leads to an Increase in the Demand

question 169

Multiple Choice

If an increase in income leads to an increase in the demand for peanut butter,then peanut butter is

• A) a neutral good.
• B) a normal good.
• C) a necessity.
• D) a complement.

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Definitions:

Perfect Correlation

A statistical relationship indicating that two variables move in complete synchronization with each other, either positively or negatively.

Real World

The physical and social environment in which individuals live and interact, outside of artificial or virtual contexts.

Correlation Coefficients

Statistical measures that indicate the extent to which two or more variables fluctuate together.

Cause and Effect

The principle that every event (effect) has one or more causes; this relationship explains why things happen and allows for prediction and intervention.