income effect

income effect definition - business

income effect

The effect on personal consumption of a change in the price of a good or service. For example, an increase in the price of gasoline results in consumers having less real purchasing power and reducing their consumption expenditures.

The American Heritage® Dictionary of Business Terms Copyright © 2009 by Houghton Mifflin Harcourt Publishing Company. Published by Houghton Mifflin Harcourt Publishing Company. All rights reserved.

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