The Budget Line Shift from Ab to Cd in the Figure

question 26

Multiple Choice

The budget line shift from ab to cd in the figure is consistent with

• A) decreases in the prices of both M and N.
• B) an increase in the price of M and a decrease in the price of N.
• C) a decrease in money income.
• D) an increase in money income and decrease in the price of N.

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Definitions:

Functional Currency

The primary currency used by a business or unit in its financial statements, reflecting the economic environment in which it operates.

Foreign Operation

This term refers to a business or branch operation located in a country different than the headquarters or parent company.

Financial Statements

Formal records of the financial activities and position of a business, individual, or other entity.