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In economic theory, a normal good is a good or service with a positive income elasticity of demand.

Normal goods can be subdivided into luxuries, with an IED of greater than one, and necessities, with an IED of between zero and one.

An example of a necessity good may be food - if your income doubles, you may eat a little more food, but hopefully not twice as much. An example of a luxury good maybe jewellery, the amount of which you buy may increase more than proportionately to a rise in income.

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