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The Price of Good X Falls

Question 25

Multiple Choice

The price of good X falls.The income-effect of this price change:


A) will usually cause X purchases to increase.
B) will usually cause X purchases to decrease.
C) may cause X purchases either to increase or decrease, there being no "usually" consequence.
D) by definition, neither increases nor decreases X purchases.
E) will not apply, since income-effects refer to changes in spendable income, not to price changes.

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