For automobile demand in the U.S., the income response tends to be larger in the:
A) short run.
B) long run.
C) The income response is the same in the long run and the short run.
D) We do not have enough information to answer this question.

Question

Quizplus · Accepted Answer

The income response is larger in the short run because consumers are more likely to purchase new cars when their incomes increase in the short term. In the long run, consumers have more time to adjust their spending habits and may choose to save or invest their additional income rather than spending it on new cars.

For Automobile Demand in the U