Ayushi Asked a Question
August 11, 2020 12:34 pmpts 30 pts
In order to generate very strong negative income effect, the proportion of income spent on a commodity should be (1) very large (2) very small (3) nil (4) moderate
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  • Nidhi taparia Best Answer
    The answer is (1). To generate a strong negative income effect, proportion of income spent on commodity has to be very large. This is the case of Giffen goods.
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