For Which of the Following Goods Is the Value of Income

question 95

Multiple Choice

For which of the following goods is the value of income elasticity most likely to be negative?​

• A)Macaroni and cheese.
• B)Champagne.
• C)Airline tickets.
• D)Clothes.
• E)Toothpaste.

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Definitions:

Market Rate

refers to the usual rate charged or paid for a good or service in a particular market, or the rate of interest available in the marketplace for investment funds.

Coupon Payment

A periodic interest payment made to the bondholders during the life of the bond.

Real Return

The rate of return on an investment after adjusting for inflation, representing the actual purchasing power gained or lost.

Purchasing Power

The value of currency expressed in terms of the amount of goods or services that one unit of money can buy.