Income elasticity of demand describes how change in income affects the quantity demanded of a good.

What are reserves? Discuss the various types of reserves used in the U.S. banking system

What will be an ideal response?

Last year the Olsen family earned $70,000 . This year their income is $77,000 . In an economy with an inflation rate of 8 percent, we can conclude that the Olsen's nominal income:

a. and real income both increased. b. and real income both decreased. c. increased, but their real income decreased. d. decreased, but their real income increased.