CFA Practice Question

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CFA Practice Question

When income increases, the demand for a good drops. This good is therefore ______.

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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