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The term _____________ describes a situation where a ________________ causes a reduction in the buying power of income, even though actual income has not changed. question 3 options:

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The term income effect used in economics describes a situation where a higher price causes a reduction in the buying power of income, even though actual income has not changed.
It denotes the change in demand of a good or service as a result of a change in a consumer's discretionary income.
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