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Income effect refers to the effect where the change in income leads to more of quantity demanded. In case of normal goods, when income increases, the quantity demanded of normal goods also increases while in the case of inferior goods, with the change in the income, the quantity demanded decreases.
Option A is correct
The income effect in the case of inferior goods is negative because the inferior goods are the goods which a person uses when there is shortage of funds. Hence, in case of the price increase, the income effect on the inferior goods will become negative.
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