Economics · Economics
What is meant by 'income effect' in economics?
- 1A decrease in demand due to a fall in price.
- 2An increase in demand due to a rise in price.
- 3The change in consumption patterns due to a change in purchasing power.✓
- 4The change in consumption patterns due to a change in consumer preferences.
Correct answer
The change in consumption patterns due to a change in purchasing power.
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