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?

An increase in income is reflected in the Fisher diagram and has the effect of

a rightward shift in the budget constraint and lowering consumption in period one only.
a rightward shift in the budget constraint and lowering consumption in period two only.
a rightward shift in the budget constraint and increasing consumption in period one only.
a rightward shift in the budget constraint and increasing consumption in both periods.

Correct - Your answer is correct.

Wrong - Your answer is wrong.

Detailed Answer

Correct answer: (D)

a rightward shift in the budget constraint and increasing consumption in both periods.

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