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    Question

    Goods for which demand increases as their price rises

    are known as: 
    A Essential goods Correct Answer Incorrect Answer
    B Capital goods Correct Answer Incorrect Answer
    C Veblen goods Correct Answer Incorrect Answer
    D Giffen goods Correct Answer Incorrect Answer

    Solution

    Giffen goods are a special type of inferior good for which demand increases as the price rises, due to the fact that these goods make up a large portion of a consumer's budget and the income effect outweighs the substitution effect.

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