Which phrase describes the income effect?
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The income effect is the change in the demand of the goods and services as a result of the change of the discretionary/voluntary income of the consumer.
Hence, the best option that describes the income effect is;
The increased income earned by suppliers because of high prices.
The income effect is the change in the demand of the goods and services as a result of the change of the discretionary/voluntary income of the consumer.
Hence, the best option that describes the income effect is;
The increased income earned by suppliers because of high prices.
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