Please select correct group

ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Please select correct group

Which of the following best describes the
income effect?
Group of answer choices
The price of designer jeans has increased, so the
buying power of your income has been reduced.
You purchase 2 new pairs of new jeans instead of
3 that year.
The bank increases interest rates on savings
accounts from .04% to 5%, so you start placing
more of your monthly income in that savings
account.
The gap between the rich and everyone else has
gotten bigger.
The price of designer jeans has increased, so you
have less of an incentive to purchase new jeans.
You purchase 3 pairs of chinos instead that year.
Transcribed Image Text:Which of the following best describes the income effect? Group of answer choices The price of designer jeans has increased, so the buying power of your income has been reduced. You purchase 2 new pairs of new jeans instead of 3 that year. The bank increases interest rates on savings accounts from .04% to 5%, so you start placing more of your monthly income in that savings account. The gap between the rich and everyone else has gotten bigger. The price of designer jeans has increased, so you have less of an incentive to purchase new jeans. You purchase 3 pairs of chinos instead that year.
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