Refer to the information provided in Figure 6.5 below to answer the question(s) that follow.
Figure 6.5Refer to Figure 6.5. Molly's budget constraint is CD. If the price of CDs increases, her new budget constraint becomes
A. AO.
B. AD.
C. BE.
D. EF.
Answer: B
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Indicate whether the statement is true or false
If a nation's central bank increased domestic interest rates, the nation's exchange rate would change if the country's exchange rate was a
A) a flexible exchange rate. B) a fixed exchange rate. C) a crawling peg. D) a nominally fixed exchange rate.
In an increasing-cost industry, an increase in industry output will
A) lead to a higher market price. B) lead to a lower market price. C) shift each firm's average fixed cost curve down. D) shift each firm's short run supply curve down.
Financial securities that represent promises to repay a fixed amount of funds are known as
A) bonds. B) stocks. C) pension funds. D) insurance premiums.