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If the Price of a Normal Good Rises,the Income Effect

Question 112

Multiple Choice

If the price of a normal good rises,the income effect


A) will increase consumption of the good and the substitution effect will decrease consumption.
B) will decrease consumption of the good and the substitution effect will increase consumption.
C) and the substitution effect will both increase consumption of the good.
D) and the substitution effect will both decrease consumption of the good.
E) is always larger than the substitution effect.

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