Which of the following statements is true about the income elasticity of demand?
A) The income elasticity of demand for normal goods is always zero.
B) The income elasticity of demand for inferior goods is always zero.
C) The income elasticity of demand for normal goods is always positive.
D) The income elasticity of demand for inferior goods is always positive.

Question

Quizplus · Accepted Answer

The income elasticity of demand for normal goods is always positive, meaning that as income increases, the demand for normal goods also increases. Option A and B are incorrect as the income elasticity of demand can be positive or negative for both normal and inferior goods. Option D is incorrect as the income elasticity of demand for inferior goods is always negative, indicating that as income increases, the demand for inferior goods decreases.

Which of the Following Statements Is True About the Income