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In economics, what is the income and substitution effect?

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Question added by Sultan Alghamdi
Date Posted: 2016/02/04
Sruthi Sunil
by Sruthi Sunil , TRAINEE , RAK FREE ZONE

Income effect demonstrates the effect of purchasing power on consumption goods like households etc where as substitution effect  describes how consumption gets effected by relative change of prices as per the market values.

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