The budget line shows
a. different levels of consumption associated with different levels of incomes.
b. the affordable combinations of goods and services you can buy with your income.
c. different levels of inputs needed to produce specific level of output.
d. none of the above.
b. the affordable combinations of goods and services you can buy with your income.
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The curve labeled A in the above figure is
A) a short-run aggregate supply curve. B) an aggregate demand curve. C) a long-run aggregate supply curve. D) a production possibilities curve.
The function that shows the inverse relationship between planned consumption and investment spending and the real interest rate, all else constant, is called the:
A) interest-related expenditure function. B) aggregate expenditure function. C) consumption function. D) investment function.