The income and substitution effects are two opposing effects that one could consider in static forecasting.

Question

Quizplus · Accepted Answer

The income and substitution effects are not opposing effects in static forecasting; rather, they are concepts in microeconomics that explain how consumers adjust their consumption of goods when prices change, with the substitution effect describing changes in consumption due to a relative price change, and the income effect describing changes in consumption due to a change in purchasing power.

The Income and Substitution Effects Are Two Opposing Effects That