If a household's income rises by 30%, its budget constraint will
A. shift out parallel to the old one.
B. shift in parallel to the old one.
C. pivot at the Y-intercept.
D. be unaffected.
Answer: A
Economics
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An economy with an expansionary gap will, in the absence of stabilization policy, eventually experience a(n) ________ in the inflation rate, leading to a(n) ________ in output.
A. decrease; increase B. increase; increase C. decrease; decrease D. increase; decrease
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