Consider the Budget Constraint Between "Spending Today" on the Horizontal

question 186

Multiple Choice

Consider the budget constraint between "spending today" on the horizontal axis and "spending a year from today" on the vertical axis.Suppose that you have $100 today and expect to receive $100 one year from today.Your money market account pays an annual interest rate of 25%,and you may borrow money at that interest rate.Suppose now that the interest rate decreases to 10%.What happens to the slope of your budget constraint relative to when the interest rate was $25%?

• A)it becomes steeper
• B)it becomes flatter
• C)it doesn't change because the budget constraint shifts in parallel to the original budget constraint
• D)it doesn't change because the budget constraint shifts out parallel to the original budget constraint

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Definitions:

Calcium

A chemical element important for many bodily functions, including bone health, muscle contraction, and nerve function.

Heat Loss

The transfer of body heat to the environment, through various mechanisms such as radiation, convection, conduction, and evaporation.

Aerobic Respiration

A process of producing cellular energy involving oxygen. Cells break down food into water and carbon dioxide and release energy.

Anaerobic Respiration

A process by which cells produce energy in the absence of oxygen, typically resulting in the by-product of lactic acid or ethanol.