Which of the Following Describes What Happens to a Consumer's

question 232

Multiple Choice

Which of the following describes what happens to a consumer's budget line if that consumer's budget increases?

• A) The budget line becomes steeper.
• B) The budget line becomes more horizontal.
• C) The budget line shifts farther away from the origin of the graph.
• D) The budget line shifts closer to the origin of the graph.
• E) The budget line does not change.

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Definitions:

Aggregate Demand

The aggregate demand for every good and service within a certain economy or market.

Long-run Phillips Curve

A concept suggesting that in the long term, there is no trade-off between inflation and unemployment, implying the curve is vertical at the natural rate of unemployment.

Inflation Rate

A percentage-based uplift in the cost of goods and services within an economy over a designated timeframe.

Zero-inflation

A situation where the price level of goods and services remains constant over time, indicating an absence of inflation in the economy.