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WAEC Economics 2001 Question 20

Question 20

Elasticity

The responsiveness of demand to a change in income is the measurement of

  1. A.foreign exchange rate.
  2. B.cross elasticity of demand
  3. C.income elasticity of demand
  4. D.price index elasticity.
Show the answer and explanation

Answer: C (income elasticity of demand)

Explanation

Income elasticity of demand measures how quantity demanded responds to a change in income.