This updated topic video looks at income elasticity of demand and the distinction between normal and inferior goods.
If, following an increase in real income, less of the good is purchased, then the good is an inferior good.
Inferior goods have a negative YED, i.e. YED < 0
When real incomes are rising during a period of economic growth, then demand for inferior goods will fall causing an inward shift of the demand curve.
When real incomes are falling during a period of recession or more generally, if wages are rising more slowly than prices, then market demand for inferior goods will rise
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