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A product whose demand rises when income rises, and falls when income falls, is given what name for this kind of good?
AAn inferior good
BA normal good
CA substitute good
DA complement good
Answer & Solution
Correct answer: B. A normal good
1. The definition ties demand directly to the direction of the income change.
2. When demand and income move in the same direction, the good is normal.
3. This is true for most goods and services, not just a special few.
4. Substitutes and complements describe relationships between two different goods, not a good's relationship to income.
_Source: OpenStax Principles of Macroeconomics for AP Courses (CC BY 4.0), Ch 3 "Demand and Supply", section 3.2 | Shifts in Demand and Supply for Goods and Services_
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