A) Negative effect
B) Positive effect
C) No effect
D) First increase then decrease
Correct Answer: A
Solution :
In economics, an inferior good is a good that decreases in demand when consumer income rises (or rises in demand when consumer income decreases), unlike normal goods, for which the opposite is observed. Normal goods are those for which consumers' demand increases when their income increases. Cheaper cars are examples of the inferior goods.
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