Assume that a 6 percent increase in income in the economy produces a 3 percent increase in the quantity demanded of good X. The coefficient of income elasticity of demand is: a. negative and therefore X is an inferior good.
b. negative and therefore X is a normal good.
c. positive and therefore X is an inferior good.
d. positive and therefore X is a normal good.

d. positive and therefore X is a normal good.

Explanation:

As we know that

And, the income elasticity of demand would equal to

= (Percentage Change in quantity demanded) ÷ (Percentage Change in income)

= (3%) ÷ (6%)

= 0.5

As we see that the income elasticity of demand is positive and 0.5 that represents the goods are normal goods as it depicts a positive relationship between the income and quantity demanded plus the elasticity also comes in positive.              

answerjointly by the fed and by the behavior of individuals who hold money and of banks in which money is held;