Imagine the income elasticity of demand for housing property in 2008-09 was exactly 1.40. Due to the Great Recession, we observed incomes dropping by 5% in 2009. How did consumers adjust their purchases (quantity demanded) for housing property?
- They bought 5% more houses
- They bought 15% more houses
- They bought 7% more houses
- They bought 5% less houses
- They bought 7% less houses