Are android apps backwards compatible?

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Should I build an app that targets Android 2.2 and release it on the Android Marketplace;

Would the app be available for download and use on devices running a version of Android OS lower than the targeted version of the app? - Let's say Android OS version 1.6.

What would happen if a user (with an Android OS version 1.6 powered device) were to attempt to run the app?

Would they be prompted to update their OS or just receive an error message?

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