Afirm knows that mike’s income elasticity of demand for hair ties is 5 while for

1) Luxury

2) Necessity

Explanation:

1)The hair tie is a luxury good for Mike because Mike has a income elasticity of 5 which means that if mike's income decreases 1% his demand for the good decreases 5%, which shows that his demand for this good is highly sensitive to his income which is a characteristic of luxury goods, as you only buy luxury goods when your income increases.

2) It is a necessity for Sally because her income elasticity to the good is 0.2 which means every 1% change in income changes her demand by just 0.2%, which shows demand is not very sensitive to income and the quantity she buys them in dont rely much on her income, which is a sign of a necessity, you buy a certain amount of necessities regardless of your income.

Checking account or current account typically has very high liquidity, low or no interest, and low minimum balance. There are three deposit accounts in banks: the current or checking account, the saving account, and the deposit account. The current or checking account usually used for the daily transactional purpose. Therefore, there is low or no interest for the account.