\begin{tabular}{l} Suppose a \( 9 \% \) increase in income led to a \( 49 \% \) increase in quantity demanded for smartwatches. Smartwatches have an income elasticity \\. Include a negative sign if applicable, and round your answer to two decimal places. \\ \hline\end{tabular}

To calculate the income elasticity of demand, you can use the formula: \[ \text{Income Elasticity of Demand (E)} = \frac{\%\text{ Change in Quantity Demanded}}{\%\text{ Change in Income}} \] Substituting in the values: \[ E = \frac{49\%}{9\%} \approx 5.44 \] The income elasticity of smartwatches is approximately \(5.44\). This signifies that smartwatches are a luxury good, as the elasticity is greater than 1, indicating that demand increases more than the increase in income.