Question

Giffen goods must be inferior goods, while inferior goods, may or may not be Giffen goods. Comment.

Answer 1

Yes. Because Giffen goods, by definition, are those inferior goods in case of which two conditions are satisfied: (i) income effect is negative, and (ii) income effect is greater than substitution effect. In the case of inferior goods, on the other hand, only one condition needs to be satisfied: that income effect is negative.