Suppose That a Consumer Purchases Just Two Goods, X and Y

question 96

Multiple Choice

Suppose that a consumer purchases just two goods, X and Y. The Y-intercept of the budget line in this case would indicate the:

• A) Maximum dollar amount of budget that the consumers has for good Y
• B) Price that the consumer has to pay for each unit of good Y
• C) Maximum quantity of good Y that the consumer could buy with a given budget
• D) Quantity of good Y that the consumer would want to buy

---

Definitions:

Interest Rate

The percentage of a sum of money charged for its use, often expressed as an annual percentage.

Reserve Requirements

The minimum proportion of customer deposits and notes that a bank must hold as reserves rather than lending out, as mandated by central banking authorities.

Government Bonds

Securities issued by a government to finance its expenditures, offering regular interest payments and the return of the original investment at maturity.

Demand Deposits

Bank accounts that allow the withdrawal of deposited money at any moment, without the need to notify the bank beforehand.