The Slope of the Budget Constraint Line Is

question 2

Multiple Choice

The slope of the budget constraint line is

• A)the ratio of the prices (p_x/p_y).
• B)the negative of the ratio of the prices (p_x/p_y).
• C)the ratio of income divided by price of y (I/p_y).
• D)none of these is correct.

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Definitions:

U.S. Dollars

The official currency of the United States, widely used as the global standard for financial transactions.

Managed Float

An exchange rate system where the price of the currency is largely determined by the supply and demand in the foreign exchange market but where central banks attempt to influence the rate by actively buying and selling currencies.

Financial Crisis

A situation where the value of assets drops rapidly and the financial system becomes destabilized, often leading to recession.

Supply of Money

The total amount of money available in an economy at a particular time, including cash, coins, bank notes, and money held in bank accounts.