Which types of goods are most adversely affected by recessions?
A)Goods for which the income elasticity coefficient is relatively low or negative.
B)Goods for which the income elasticity coefficient is relatively high and positive.
C)Goods for which the cross elasticity coefficient is positive.
D)Goods for which the cross elasticity coefficient is negative.

Question

Quizplus · Accepted Answer

Goods for which the income elasticity coefficient is relatively high and positive are most adversely affected by recessions because these goods are considered luxury items or non-essential, and their demand decreases significantly as consumer income falls.

Which Types of Goods Are Most Adversely Affected by Recessions