Suppose All Prices Double and Income Triples

question 19

Multiple Choice

Suppose all prices double and income triples. The budget line:

• A)will become steeper.
• B)will become flatter.
• C)will shift in toward the origin.
• D)will shift out from the origin.

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Definitions:

Dividends

A portion of a company's earnings distributed to its shareholders, often expressed as a fixed amount per share.

IFRS

International Financial Reporting Standards, a set of global accounting standards that guide the financial reporting of public companies.

Statement of Cash Flows

A financial documentation that illustrates the effect of changes in balance sheet accounts and profit on cash and cash equivalents, dividing the analysis into categories of operating, investing, and financing activities.

Noncash Investing

Investing activities that do not involve the immediate outflow of cash, such as acquiring assets through finance leases.