Multiple Choice
A Giffen good is one for which the quantity demanded rises as the price rises.What does the income effect do to cause this
A) It reinforces, but it is smaller than the substitution effect.
B) It reinforces, and it is greater than the substitution effect.
C) It counteracts, but it is smaller than the substitution effect.
D) It counteracts, and it is greater than the substitution effect.
Correct Answer:
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