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Commerce · Q620

Economics

Graduate and Post Graduate · Commerce · question 620

Q620

Which one of the following statement is true?

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

Answer: Option A

Solution

Answer: Option A
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