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Income Determination in the Open Economy

An income-dem...

Question

An income-demand curve for a 'luxury commodity' slopes _____________.

A

upwards to the right from the origin

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B

vertically

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C

upwards from left to right only beyond a certain level of consumer's income

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D

horizontally

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Solution

The correct option is C upwards from left to right only beyond a certain level of consumer's income
An income-demand curve for a "luxury commodity" slopes upwards from left to right, only beyond a certain level of consumer's income, before which it remains zero.

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Income Determination in the Open Economy

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