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If money income increases, which of the following is likely to happen (ceteris paribus)?


A.) Qd increases


B.) Demand for substitute goods increases


C.) Demand for inferior goods increases


D.) Demand for normal goods increases

Respuesta :

Martebi

An increase in money income increases will therefore cause Demand for normal goods increases

That is to say, For a normal economic goods, an increase or rise in income will make consumers demand and buy a greater quantity of goods.

For better understanding, lets explain the income effect

  • Income effect is simply known as that change that occurs in consuming of a commodity due to an increase in purchasing power, with relative prices stay fixed.
  • In normal good, an increase in demand of goods as a result of an increase or a rise in consumers' income. That is when waged increases, the demand for normal goods increases and vice versa.

From the above, we can therefore say that the answer An increase in money income increases will therefore cause Demand for normal goods increases

That is to say, For a normal economic goods, an increase or rise in income will make consumers demand and buy a greater quantity of goods, is correct

Learn more about normal goods from:

https://brainly.com/question/15069740

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