For any change in a business cycle, the percentage change in demand for a good with an income elasticity of 2.0 will be larger than the percentage change in demand for a good with an income elasticity of 1.0.

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This is because a good with an income elasticity of 2.0 is considered a luxury good, meaning that as income increases, the percentage change in demand will be greater than the percentage change in income. On the other hand, a good with an income elasticity of 1.0 is considered a necessity, meaning that the percentage change in demand will be equal to the percentage change in income. Therefore, any change in the business cycle will have a greater effect on the demand for luxury goods compared to necessary goods.

For Any Change in a Business Cycle, the Percentage Change