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.
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.
Economics Today and Tomorrow, Student Edition
1st Edition
ISBN:9780078747663
Author:McGraw-Hill
Publisher:McGraw-Hill
Chapter3: Your Role As A Consumer
Section3.1: Consumption, Income, And Decision Making
Problem 1R
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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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