When the Price of a Good Increases, the Budget Constraint

question 184

True/False

When the price of a good increases, the budget constraint shifts in parallel to the original budget constraint.

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Definitions:

Recessionary Gap

The difference between the actual output of an economy and its potential output at full employment, during a recession.

Discount Rate

The rate at which the central bank lends money to commercial banks and other financial institutions through its discount window.

Fiscal Expenditure

Government spending, including spending on goods and services, welfare, and public works, financed through taxation or borrowing.

Taxes

Taxes are compulsory financial charges or levies imposed by a government on individuals or entities to finance government spending and various public expenditures.