To separate the income and substitute effects, the imaginary budget line should be
A) tangent to the new indifference curve and parallel to the new budget line.
B) tangent to the new indifference curve and parallel to the old budget line.
C) tangent to the old indifference curve and parallel to the new budget line.
D) tangent to the old indifference curve and parallel to the old budget line.
C
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