When the Price of a Good Decreases, the Budget Constraint

question 55

True/False

When the price of a good decreases, the budget constraint shifts out parallel to the original budget constraint.

---

Definitions:

Collection Delay

The time lag between when a payment is made by a customer and when the funds are available to the recipient.

Lockbox System

A service offered by banks to companies for the receipt of payment from customers, involving the collection of payments directly at a postal box and swiftly depositing them into the company's bank account.

Treasury Bills

Government-issued securities with maturity of up to a year, offered below their nominal value.

Collection Time

The duration it takes for a business to receive payments owed by its customers after a sale has been made.