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Question
Tammy spends her money on lemonade and iced tea. If the price of lemonade falls, it is as though her income . a. Increases.
b. Decreases.
c. Stays the same.
Solutions
VerifiedSolution A
Solution B
Solution C
Answered 10 months ago
Step 1
1 of 3The correct answer is:
Answered 1 year ago
Step 1
1 of 2If the price of lemonade falls, she will be able to purchase more lemonade, which is equal to the increase in real income.
Increase in nominal income at the same price (before the price fell) would also make her able to purchase more lemonade.
The correct answer is a.
Answered 2 years ago
a. Increases.
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