SQA National 5 Economics Practice Exam 2026 - Free Economics Practice Questions and Study Guide

When consumer incomes rise, the demand for normal goods typically increases. Normal goods are those that consumers tend to buy more of when they have higher incomes, as they are often considered desirable or necessary for a better quality of life. Examples of normal goods include clothing, household appliances, and vacations. As people have more disposable income, they are more likely to purchase these goods, leading to an increase in overall demand.

This relationship between income and demand is a fundamental principle in economics, known as the income effect. As income grows, consumers feel more confident in their financial situation, allowing them to spend more on goods that may enhance their lifestyle or meet their needs.

In contrast, other options suggest that demand remains unchanged, decreases, or becomes unpredictable, which does not accurately capture the typical behavior seen with normal goods in response to rising incomes. The increase in demand reflects consumer preferences, buying power, and the positive correlation between income levels and consumption for normal goods.