Which of the following must be true for a Giffen good?
A) The good must be inferior and the income effect must be larger than the substitution effect.
B) The good must be inferior and the substitution effect must be larger than the income effect.
C) Both the income and the substitution effect of a price rise will be positive.
D) Both the income and the substitution effect of a price rise will be negative.
Correct Answer:
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