An Increase in the Price of a Good Causes

question 114

Multiple Choice

An increase in the price of a good causes

• A) a change in the slope of the budget line.
• B) an increase in the consumption of that good.
• C) a rightward shift of the demand curve for that good.
• D) a parallel rightward shift of the budget line.

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Definitions:

Treasury Inflation-Protected Securities (TIPS)

Government bonds whose principal value is adjusted based on changes in the inflation rate, protecting investors from inflation.

Consumer Price Index

An index that measures changes in the price level of a market basket of consumer goods and services purchased by households, often used as a measure of inflation.

Inflation-Adjusted

Refers to figures or financial metrics that have been altered to reflect inflation's effects, presenting a more accurate picture of real value or purchasing power.