In a Budget Line/indifference Curve Diagram,at the Consumer's Equilibrium at the Best

question 168

Multiple Choice

In a budget line/indifference curve diagram,at the consumer's equilibrium at the best affordable point,

• A) any movement upward or downward on the budget line will move the consumer to a less preferred point.
• B) any movement to the northeast to higher indifference curves moves the consumer to a less preferred point.
• C) the slope of the budget line exceeds the marginal rate of substitution by as much as possible.
• D) the budget line has a positive slope and the indifference curve has a negative slope.
• E) the budget line has a negative slope and the indifference curve has a positive slope.

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Definitions:

Securities

Assets that denote a share in the equity of a corporation available on the public market (stock), a lending agreement with a government or corporate body (bond), or ownership claims evidenced by an option.

New York Federal Reserve Bank

One of the 12 regional Reserve Banks in the Federal Reserve System, playing a key role in monetary policy, financial supervision, and the payment system.

Federal Advisory Council

A group of individuals who provide advice and support to a central governing body, such as the Federal Reserve in the United States, on matters of economic policy.

Expansionary Monetary Policy

Monetary policy measures, such as lowering interest rates and increasing money supply, used by central banks to stimulate economic growth.