The Income Effect Refers to the Impact of a Change

question 27

Multiple Choice

The income effect refers to the impact of a change in

• A)income on the price of a good
• B)the general price level caused by a change in the price of another good
• C)the price of a good on real income
• D)the price of a substitute for the good under consideration
• E)demand when income changes

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Definitions:

Economy

A system by which goods and services are produced, distributed, and consumed in a society.

Computer Programmer

A professional who writes and tests code that enables software applications and operating systems to function.

Provincial Government

The level of government responsible for administering the provinces or regions of a country, often with specific local powers.

Tertiary Sector

The segment of the economy that provides services rather than producing goods, including industries such as retail, entertainment, financial services, and health care.