In Year 1, the Price of Good X Was $4

question 31

Multiple Choice

In year 1, the price of good x was $4, the price of good y was $1, and income was $70.In year 2, the price of x was $9, the price of good y was $2, and income was $70.On a graph with x on the horizontal axis and y on the vertical, the new budget line is

• A)steeper than the old one and lies below it.
• B)steeper than the old one and lies above it.
• C)flatter than the old one and lies below it.
• D)flatter than the old one and lies above it.
• E)None of the above.

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Definitions:

Jobless Recovery

A situation where the economy begins to recover from a recession, but the unemployment rate remains high or continues to increase.

Recognition Lag

Recognition Lag is the time delay between when an economic problem becomes apparent and when it is recognized by policymakers.

Stimulus Package

A collection of fiscal and monetary policies implemented by a government to stimulate a struggling economy.

Fiscal Policy

Governmental adjustments in spending levels and tax rates aimed at influencing economic activity.