In Practice,it Is Usual to Assume That,in Explaining the Impact

question 76

Multiple Choice

In practice,it is usual to assume that,in explaining the impact of a change in interest rates ________.

• A)the substitution effects outweigh the income effects
• B)the income effect outweighs the substitution effect
• C)the income and substitution effects cancel out with one another
• D)the income effect increases the severity of the substitution effect

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