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Question
Which of the following statements about the real-income effect and the substitution effect is true?
a. The real-income effect always exists, but the substitution effect does not always exist.
b. The real-income effect and the substitution effect always exist.
c. The real-income effect does not always exist, but the substitution effect always exists.
d. The real-income effect and the substitution effect cannot occur at the same time.
e. The real-income effect and the substitution effect occur only with an increase in price.
Answer
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Related questions
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