Suppose National Income Is Rising Steadily at 2% Per Year

Multiple Choice

Suppose national income is rising steadily at 2% per year over a 5-year period.Over the same time period,suppose quantity demanded for iPods and iPhones increases at 5% 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) 4.0; normal
C) 2.5; luxury
D) 10.0; necessities
E) 4.0; necessities