A Decrease in the Price of Good Y Will Have

question 148

Multiple Choice

A decrease in the price of good Y will have what effect on the budget line on a normal X-Y graph?

• A) Increase the vertical intercept
• B) Decrease the horizontal intercept
• C) Parallel outward shift of the line
• D) Parallel inward shift of the line

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Definitions:

Aggregate Demand

The grand total of all demands for goods and services within an economic sphere, established at a certain collective price level during a fixed timeframe.

Aggregate Supply

The total supply of goods and services that firms in an economy plan on selling during a specific time period, at a given price level.

Capital Stock

The total amount of physical goods and financial assets that are used in the production of goods and services in an economy.

Aggregate Demand

The summed demand for goods and services across an economic milieu, set at a specific price level for a given time interval.