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Commerce · Q1366

Economics

Graduate and Post Graduate · Commerce · question 1366

Q1366

Which of the following statement is true?

A.
In inferior goods, the income and substitution effects are negative
B.
In inferior goods, the income and substitution effects are positive
C.
In case of inferior goods, the income effect is negative although the substitution effect is positive
Answer
D.
In case of inferior goods, the income effect is positive although the substitution effect is negative

Answer: Option C

Solution

Answer: Option C
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