- CFA Exams
- CFA Level I Exam
- Topic 2. Economics
- Learning Module 8. Topics in Demand and Supply Analysis
- Subject 3. Substitution Effect, Income Effect, Normal and Inferior Goods
CFA Practice Question
When income increases, the demand for a good drops. This good is therefore ______.
B. a Giffen good which also an inferior good
C. a Veblen good
A. an inferior good but not a Giffen good
B. a Giffen good which also an inferior good
C. a Veblen good
Correct Answer: A
In order to be a true Giffen good, price must be the only thing that changes to get a change in demand.
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