What is the outcome of increased income on demand?

Increased income typically leads to an increase in demand for normal goods. Normal goods are those whose consumption rises when consumer income increases, as people have more disposable income to spend on products that enhance their lifestyle or satisfy their needs beyond mere survival. For instance, with higher income, consumers may choose to buy more clothing, upgraded electronics, or dining experiences that they would not have considered before.

This phenomenon is associated with the basic principles of consumer behavior – as people's financial capacity grows, their preferences shift towards more quality or variety in their purchases. This contrasts with inferior goods, where demand decreases as incomes increase. Thus, the correct outcome of increased income is a correlation with an increase in demand for normal goods, highlighting the direct relationship between consumer income and consumption patterns.