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When Consumers' Incomes Decline During a Recession, They Increase Their

Question 93

Multiple Choice

When consumers' incomes decline during a recession, they increase their consumption of instant coffee and reduce their consumption of other beverages. Therefore, instant coffee:


A) is a necessity.
B) has a negative income elasticity of demand.
C) has an income elasticity of demand greater than zero but less than one.
D) is a normal good.

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