Saturday, July 28, 2018

INCOME EFFECTS ON ECONOMY

First question for all of you. If one person lost his job or decrease his salary then what would happen to his demand for ice cream in one summer?
       If your salary would decrease or your source of income would decrease then you have less to spend in total, you would have decrease your expensive demand.

       When your income decrease or falls and at that Same time demand for a goods or cost of goods falls then it is called a NORMAL GOOD.
       Every goods are not normal goods. If the income decrease but cost of goods or demand of goods increase then it's called inferior good.
    We can take the example of if someone's income decrease then that person would prefer bus for traveling instead of car and bike.

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