Suppose National Income Is Rising Steadily at 2 Percent Per

Multiple Choice

Suppose national income is rising steadily at 2 percent per year over a 5- year period. Over the same time period, suppose quantity demanded for iPods and iPhones increases at 5 percent per year, but no other relevant variables are changing. We can conclude that the income elasticity for these products is and that these products are goods.

A) 0.4; inferior
B) 2.5; luxury
C) 10.0; necessities
D) 4.0; necessities
E) 4.0; normal