Explain the effect of the following on demand for a good:
(i) Rise in Income for Normal Goods.
(ii) Rise in Income for Inferior Goods.
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Explanation:
the income effect is the change in demand for a good or service caused by a change in a consumer's purchasing power resulting from a change in real income. This change can be the result of a rise in wages etc., or because existing income is freed up by a decrease or increase in the price of a good that money is being spent on
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