Exhibit 20-8 ​ Refer to Exhibit 20-8. a Move of the Budget Constraint

question 113

Multiple Choice

Exhibit 20-8 ​

Refer to Exhibit 20-8. A move of the budget constraint from 2 to 3 is caused by a

• A)rise in the price of good X.
• B)fall in the price of good X.
• C)rise in the price of good Y.
• D)fall in income.

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Definitions:

Corporate Tax

A tax imposed on the income or profit of corporations and businesses by the government.

Individual Income Tax

A tax imposed by federal, state, and/or local governments on the income earned by individuals.

Earnings and Profits

A measure of a company's ability to generate income over its expenses, often used in corporate taxation.

Capital Gain

The profit from the sale of a capital asset, such as stocks, bonds, or real estate, exceeding the purchase price.