What is the effect of a rise in income on the demand curve?

Show Answers

Cause movement along the demand curveResult in a shift of the supply curveCause the demand curve to shiftLead to an increase in quantity demanded along the curveHave no impact on demand or supply

Explanation

An increase in income typically changes consumers' purchasing power, causing the entire demand curve to shift rather than just moving along it. Therefore, it results in a shift of the demand curve, not the supply curve or a movement along the existing demand curve.