If the price of good X (measured on the horizontal axis of a budget line diagram) increases at the same time that the price of good Y (measured on the vertical axis) decreases, the budget line
a. will become flatter
b. will become steeper
c. could become either steeper or flatter, depending on the sizes of the price changes
d. will rotate about its original point of intersection with the horizontal axis
e. will shift outward, but not in a parallel fashion
B
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Refer to the Article Summary. The increase in GDP discussed in the article summary was due in part to increases in commercial and residential construction
Increases in commercial and residential construction will cause a(n) ________ the aggregate expenditure curve. A) movement down along B) downward shift of C) upward shift of D) movement up along
Anything that would cause people to want to hold more of their money as cash and less in the form of check able deposits would
a. increase the multiple expansion of the money supply. b. cause the Federal Reserve to raise the reserve requirement. c. reduce the multiple expansion of the money supply. d. increase the size of the money supply.
On what type of income do many economists believe that people base their consumption?
According to liquidity preference theory, an increase in the price level shifts the
a. money demand curve rightward, so the interest rate increases. b. money demand curve rightward, so the interest rate decreases. c. money demand curve leftward, so the interest rate decreases. d. money demand curve leftward, so the interest rate increases.