When the price of a product falls, the purchasing power of our money income rises and thus permits us to purchase more of the product.This statement describes:

Question

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The statement describes the income effect, which is the change in quantity demanded of a particular good or service resulting from a change in real income. When the price of a product falls, consumers' purchasing power increases, allowing them to buy more of the good with their income. This is the income effect.

When the Price of a Product Falls, the Purchasing Power