Answers

Ajay Koli
Aug 3, 2020

Normal Goods : These are the goods the demand for which increases as income of the buyer rises. There is a positive relationship between income and demand or  income effect is positive.
Example ; Rice, Wheat

Inferior Goods : These are the goods the demand for which decreases as income of buyer rises. Thus, there is negative relationship between income and demand or  income effect is negative.
Example : coarse grain, coarse cloth.