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    Question

    The essence of Engel's law is that as family incomes

    rises
    A The savings rate increases Correct Answer Incorrect Answer
    B The proportion of income spent on food declines Correct Answer Incorrect Answer
    C Expenditure on food declines Correct Answer Incorrect Answer
    D Proportion of income spent on luxuries declines Correct Answer Incorrect Answer

    Solution

    Engel's law is an observation in economics stating that  as income rises, the proportion of income spent on food falls , even if absolute expenditure on food rises.

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