The income effect of a price change

A Refers to the influence of real income changes rather than nominal income changes on consumer purchases

B Refers to the influence of nominal income changes rather than real income changes on consumer purchases

C Measures the effect of both real and nominal income changes on consumer purchases

D Does not relate to changes in either real or nominal income but rather to the perception of change in the mind of the consumer as measured by indifference curves.

The price changes of a good is more likely to have a greater effect on its demand

A The smaller the arc of the indifference curve

B The harder it is to substitute towards an alternative product

C The larger the budget share spent on that good

D None of the above