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      Question

      Goods for which demand increases as their price rises

      are known as:Β 
      A Essential goods Correct Answer Incorrect Answer
      B Capital goods Correct Answer Incorrect Answer
      C Veblen goods Correct Answer Incorrect Answer
      D Giffen goods Correct Answer Incorrect Answer

      Solution

      Giffen goods are a special type of inferior good for which demand increases as the price rises, due to the fact that these goods make up a large portion of a consumer's budget and the income effect outweighs the substitution effect.

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