Determine whether each of the following statements is true or false and explain why you think so.

(A) Suppose a consumer purchases only three goods: x, y, and z. All three goods can be normal, but not all of them can be inferior.

(B) When the price of bread has decreased, the consumption of bread has increased. Therefore, bread can be considered as a Giffen good.

(C) Suppose the price of an inferior good increases. An increase in the price of the inferior good results in the decrease in the consumption of the inferior good because the size of income effect is greater than the size of substitution effect.

(D) To capture the substitution effect and income effect of the price change, the imaginary budget line is drawn. The imaginary budget line must be parallel to the initial budget line and tangent to the new indifference curve