The income elasticity coefficient is:
A) important because we need to know the impact of recession on sales.
B) irrelevant because we cannot compute it.
C) too complicated and therefore is not widely used in economics.
D) never used to estimate the impact on inferior goods.

Question

Quizplus · Accepted Answer

The income elasticity coefficient is important because it helps us understand the impact of changes in income on demand for goods and services. This can be especially relevant during recessionary periods when people may have less disposable income and may need to cut back on certain purchases.

The Income Elasticity Coefficient Is