An Increase in Income Will

question 79

Multiple Choice

An increase in income will

• A) shift the budget constraint to the right.
• B) make the budget constraint steeper.
• C) make the budget constraint flatter.
• D) make the budget constraint more bowed.

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Definitions:

Destroyed Money

The process of physically eliminating money from circulation, typically by central banks, to manage a currency's supply.

Check Clearing

The process by which banks settle transactions by transferring money from the check writer's account to the recipient's account.

Federal Funds Rate

The interest rate at which banks lend reserve balances to other banks overnight, on an uncollateralized basis.

Discount Rate

The interest rate charged by central banks for short-term loans to commercial banks.