The income effect describes how consumer spending changes as income rises or falls, while the substitution effect reflects how people shift purchases when prices change or alternatives become more ...

Investopedia contributors come from a range of backgrounds, and over 25 years there have been thousands of expert writers and editors who have contributed. Erika Rasure is globally-recognized as a ...

Investopedia contributors come from a range of backgrounds, and over 25 years there have been thousands of expert writers and editors who have contributed. Erika Rasure is globally-recognized as a ...