For normal goods, as income falls demand decreases or shifts back. For inferior goods, as income rises demand decreases or shifts back.

   The graph to the right illustrates the effect of a decrease in income for a normal good, or an increase in income for an inferior good.

   For normal goods, a reduction in income causes the consumer to feel worse off and therefore, fewer normal goods are purchased. An increase in income causes consumers to feel better off and therefore, they choose to purchase fewer inferior goods.

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