If the price of good X (measured on the horizontal axis of a budget line diagram) increases at the same time that the price of good Y (measured on the vertical axis) decreases, the budget line
a. will become flatter
b. will become steeper
c. could become either steeper or flatter, depending on the sizes of the price changes
d. will rotate about its original point of intersection with the horizontal axis
e. will shift outward, but not in a parallel fashion
B
You might also like to view...
The demand for Mexican tomatoes by an American food grocery chain creates a
A) demand for the U.S. dollar. B) demand for an interest rate differential. C) supply of Mexican pesos. D) supply of U.S. dollars.
One event that undermined the belief that the Phillips curve represented a structural relationship was
A) the belief of Milton Friedman and Edmund Phelps that expected inflation remains constant. B) the erratic behavior of unemployment rates and inflation rates during the 1960s. C) the extended period of time that both unemployment and inflation remained high during the Great Depression. D) the increase in both the inflation rate and the unemployment rate in the 1970s.