If a Consumer's Budget Increases,the Budget Line

question 245

Multiple Choice

If a consumer's budget increases,the budget line

• A) rotates outward and its slope changes.
• B) rotates inward and its slope changes.
• C) shifts outward and its slope does not change.
• D) shifts inward and its slope does not change.
• E) does not change.

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Definitions:

Investment Expenditures

Spending by businesses or individuals on capital assets that are expected to yield benefits or profits over the long term.

Interest Rates

The percentage of a sum of money charged for its use, typically by a bank to borrowers.

Profit Expectations

Anticipations or forecasts about the profits a business aims to achieve in a future period.

Loanable Funds

The loanable funds market is a concept in economics where the supply of and demand for loans determine the interest rate, including all forms of credit like loans, bonds, or savings deposits.