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The Income Effect of a Price Change Is the Effect

Question 80

Multiple Choice

The income effect of a price change is the effect on consumption changes as a result of a change in:


A) income when all prices change in the same proportion.
B) purchasing power caused by a change in the price of the good.
C) income caused by a change in the price of labor.
D) income sufficient to offset the effect of a price change.

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