Identify the Statement That Is False

question 21

Multiple Choice

Identify the statement that is false.Assume that the price of good increases.

• A) The substitution effect shows that the consumption of good falls, regardless of whether is a normal or inferior good.
• B) The income effect shows that the consumption of good rises if good is an inferior good.
• C) The overall effect shows that the consumer purchases more of good if good is a Giffen good.
• D) The overall effect shows that the consumer purchases more of good if good is an inferior good.

---

Definitions:

Partialed Out

A statistical process of removing the effect of one or more variables to better understand the relationship between other variables.

Correlation Drops

Occurs when the strength or consistency of the relationship between two variables decreases, signifying a change in how closely they are related.

Original Correlation

The initial statistical relationship observed between two variables before any manipulation or control is applied.

Multiple Correlation

A statistical measure representing the relationship between one dependent variable and two or more independent variables.