Multiple Choice
Suppose that when your wealth increases from $100,000 to $200,000, your holdings of stock mutual funds increases from $20,000 to $50,000. Your wealth elasticity of demand for stock mutual funds then is
A) less than 1 and stock mutual funds are a necessity asset.
B) greater than 1 and stock mutual funds are a luxury asset.
C) less than 1 and stock mutual funds are a luxury asset.
D) greater than 1 and stock mutual funds are a necessity asset.
Correct Answer:
Verified
Correct Answer:
Verified
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