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A product whose demand falls when income rises, and rises when income falls, is given what name for this kind of good?
AA normal good
BA substitute good
CAn inferior good
DA complement good
Answer & Solution
Correct answer: C. An inferior good
1. The definition ties demand directly to the direction of the income change.
2. When demand and income move in opposite directions, the good is inferior.
3. Generic groceries and used cars are examples where richer consumers buy relatively less.
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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