A budget line can show all butoneof the following statements below. Which one does itnotshow?
A. The budget line shows the available choices to a household.
B. It is a curve of constant expenditure.
C. The slope of the budget line increases as the quantity of a good consumed increases.
D. The budget line shows how much it costs to purchase a combination of two goods, for a set income and prices.
Answer: C
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Prices of final goods and services in Eduland have increased by 23% between Year 1 and Year 2. If the GDP deflator of Eduland in Year 1 was 100, the GDP deflator of Eduland in Year 2 is ________
A) 50 B) 112 C) 103 D) 123
If the Fed sterilizes the purchase of foreign assets,
A) the monetary base is left unchanged. B) the monetary base rises by the amount of the purchase. C) the monetary base falls by the amount of the purchase. D) the monetary base may rise, fall, or remain unchanged depending on the reaction of domestic interest rates to the purchase.