The Two-Period Budget Line for Incomes Y₁ and Y₂ and Consumption

question 2

Multiple Choice

The two-period budget line for incomes Y₁ and Y₂ and consumption C₁ and C₂ can be written as ,if the interest rate were to fall the budget line would

• A) shift to the left in a parallel fashion
• B) shift to the right in a parallel fashion
• C) rotate counter-clockwise pivoting on Y₁, Y₂
• D) rotate clockwise pivoting on Y₁, Y₂

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Definitions:

Committees of Correspondence

Networks of communication established among the American colonies to disseminate colonial opposition to British policies through the exchange of letters and pamphlets.

Writs of Assistance

Legal documents that served as general search warrants enabling colonial British officials to search any premises for smuggled goods without specifying the place or items being sought, leading to tensions that contributed to the American Revolution.

Search Warrants

Legal documents issued by a court or judicial officer that authorize law enforcement officials to conduct searches of premises for evidence.

Sugar Act

A law enacted by the British Parliament in 1764 aiming to raise revenue from the American colonies by imposing a tax on sugar and molasses imported into the colonies.