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    Question

    Income elasticity of inferior goods is

    ........................?
    A Between zero to one Correct Answer Incorrect Answer
    B Positive Correct Answer Incorrect Answer
    C Infinite Correct Answer Incorrect Answer
    D Negative Correct Answer Incorrect Answer

    Solution

    The demand for inferior goods rises when the real income of consumers falls and vice versa. Hence, income elasticity of demand for inferior goods is negative.

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