Final answer:
false. The income and substitution effects are not opposing effects in static forecasting. Instead, they are twin components of a single cause - a change in price. Economists analyze both effects together to understand consumer choices.
Step-by-step explanation:
The statement that the income and substitution effects are two opposing effects that one could consider in static forecasting is false.
While the income and substitution effects are often discussed together, they are not opposing effects. Instead, they are twin components of a single cause - a change in price. When analyzing the effects of a price change, economists consider both the income effect and the substitution effect as they work together to impact consumer choices.
For example, if the price of a good decreases, the substitution effect would increase consumption of that good as consumers substitute it for more expensive alternatives. At the same time, the income effect may also increase consumption as consumers experience a boost in their purchasing power.