In a graph of choice sets, a price change affects the ratio but does not affect the budget line.
Answer the following statement true (T) or false (F)
False
Rationale: A price change will cause the slope of a budget line to change.
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As the Federal Reserve ________ bonds, interest rates rise and the price of bonds ________
A) sells; falls B) buys; rises C) sells; rises D) buys; falls
A lower price elasticity of demand coefficient occurs when:
a. many substitutes exist. b. the quantity demanded is more responsive. c. few substitutes exist. d. the market is broadly defined.
The concurrent problems of inflation and unemployment are termed:
a. depression. b. downturn. c. deflation. d. demand-pull inflation. e. stagflation.
Which of the following is the most frequently used tool the Fed uses to control the supply of money?
A. the discount rate B. the reserve requirements C. open market operations D. the 30-year home-mortgage interest rate