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Question : Which of the following curve describes the variation of household expenditure on a particular good with respect to household income?

Option 1: Demand curve

Option 2: Engel curve

Option 3: Great Gatsby curve

Option 4: Cost curve


Team Careers360 15th Jan, 2024
Answer (1)
Team Careers360 20th Jan, 2024

Correct Answer: Engel curve


Solution : The correct option is the Engel curve.

The Engel curve is the curve that depicts how households spend on a specific good depending on household income. An Engel curve depicts while controlling for other variables, the relationship between the quantity of a good consumed and a consumer's income. It helps to show how shifting income levels affect consumers' desire for a particular good.

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