When income rises
A) demand for a normal good rises.
B) demand for a luxury good falls.
C) demand for an inferior good rises.
D) quantity of a normal good demanded rises.

Question

Quizplus · Accepted Answer

When income rises, people have more purchasing power and tend to buy more goods and services. For normal goods, which are goods for which demand increases as income increases, this means that the demand for these goods will rise along with income. Therefore, the correct answer is A, demand for a normal good rises.

When Income Rises