Answer
A) Prices and quantities both rise.
Work Step by Step
Inferior goods, by definition, are goods whose quantity demanded decrease with increase in income. Thus, during recession when income decreases, the demand increases.
Principles of Macroeconomics 7th Edition
by Mankiw, N. Gregory
Published by
South-Western College
ISBN 10:
1-28516-591-8
ISBN 13:
978-1-28516-591-2
Chapter 4 - The Market Forces of Supply and Demand - Quick Check Multiple Choice - Page 86: 5
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