During recessions, when some workers lose their jobs and have lower incomes, sales of durable goods (goods with a life expectancy of 3 years or more)decline. Apparently, durable goods are:
A)substitutes.
B)normal goods.
C)complements.
D)inferior goods.

Question

Quizplus · Accepted Answer

The income elasticity of demand for a good is the percentage by which quantity demanded changes in response to a one percent change in income. For normal goods, an increase in income leads to an increase in consumption (and a decrease in income leads to a decrease in consumption), implying that the income elasticity of demand is positive for normal goods.

During Recessions, When Some Workers Lose Their Jobs and Have