Which of the following is correct?
A) The effect of a compensated price change equals the effect of an uncompensated price change plus the effect of providing compensation.
B) The effect of a compensated price change equals the effect of an uncompensated price change plus the effect of removing compensation.
C) The effect of an uncompensated price change equals the effect of an uncompensated price change plus the effect of providing compensation.
D) The effect of a compensated price change equals the substitution effect of the price change plus the income effect of the price change.
Correct Answer:
Verified
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