When a consumer is at his or her best affordable point, the budget line
A) is flatter than the highest attainable indifference curve.
B) is tangent to the highest attainable indifference curve.
C) is steeper than the highest attainable indifference curve.
D) does not touch the highest attainable indifference curve.
B
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The portfolio theories of money demand state that the demand for real money balances is ________ related to income and ________ related to the nominal interest rate
A) positively; negatively B) positively; positively C) negatively; negatively D) negatively; positively
Historical analysis of real interest rates in the United States shows that
A) real interest rates were unusually low in both the 1970s and 1980s. B) real interest rates were unusually high in both the 1970s and 1980s. C) real interest rates were unusually low in the 1970s and unusually high in the 1980s. D) real interest rates were unusually low in the 1980s, spurring the economic growth that occurred during the Reagan administration.