A Budget Constraint

question 209

Multiple Choice

A budget constraint

• A)represents the bundles of consumption that make a consumer equally happy.
• B)refers to the limited amount of income available to consumers to spend on goods and services.
• C)reflects the desire by consumers to increase their income.
• D)shows the prices that a consumer chooses to pay for products he consumes.

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Definitions:

Exchange

The act of giving one thing and receiving another in return, often referring to the trade of goods, services, or financial instruments.

Functions Of Money

The core roles money plays in an economy, including serving as a medium of exchange, a unit of account, a store of value, and sometimes, a standard of deferred payment.

Medium Of Exchange

An intermediary instrument or system used to facilitate the sale, purchase, or trade of goods between parties.

Unit Of Account

A common unit for measuring the value of each good or service.