"Income elasticity of demand is always positive." Do you agree or disagree? Explain
What will be an ideal response?
Disagree. Income elasticity of demand can be positive or negative. For normal goods, an increase in income results in an increase in demand. For inferior goods, however, an increase in income results in a decrease in demand.
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The U.S. International Trade Commission rejects many antidumping and countervailing duty allegations because there is:
a. insufficient evidence that a U.S. industry is materially injured as a result of dumping or export subsidization. b. insufficient evidence of dumping or export subsidization. c. insufficient evidence of dumping or export subsidization and insufficient evidence that a U.S. industry is materially injured as a result of dumping or export subsidization. d. no evidence of dumping or export subsidization, but there is evidence that a U.S. industry is materially injured.
From the Keynesian perspective, an exogenous increase in investment is likely to lead to
A) a decrease in interest rates. B) an increase in output. C) an increase in the money supply. D) a decrease in government spending.