If the Budget Constraint Is Given by M = P₁Y₁

question 16

Multiple Choice

If the budget constraint is given by M = P₁Y₁ + P₂Y₂ then:

• A) the y-intercept is given by M/P₁
• B) the y-intercept is given by M/P₂
• C) the y-intercept is given by Y₂/P₁
• D) the y-intercept is given by Y₁/P₁

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Definitions:

Capital Gain Distributions

The payment of proceeds realized from the sale of an asset held in a mutual fund or ETF, distributed to investors as a taxable distribution.

Income Distributions

Payments, often periodic, received by investors from assets they own, such as dividends from stocks or interest from bonds.

Rate of Return

The increase or decrease in the value of an investment during a set period, represented as a proportion of the investment's original price.