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Which of the Following Statements Is FALSE

Question 384

Multiple Choice

Which of the following statements is FALSE?


A) When the relative price of a good falls, the substitution effect always leads the consumer to substitute more of that good for the other good.
B) For a normal good, the income effect reinforces the substitution effect.
C) For an inferior good, the income effect offsets the substitution effect.
D) For an inferior good, the income effect is positive.

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