Refer to Scenario 17.2. The highest level of y* that can be set and still have the high-productivity people choose to meet it is

A budget constraint is a straight line because:

A) the tastes and preferences of the consumer change along the constraint. B) a consumer faces a fixed price of both goods that do not change with changes in consumption. C) the opportunity cost of buying each of the goods changes along the constraint. D) a consumer has a limited money income.

"The Big Mac index is The Economist's burger-based measure of whether currencies are over- or undervalued.... [E]xchange rates should eventually adjust to make the price of a basket of goods the same in each country

Our basket contains just one item: the Big Mac hamburger, which is pretty much the same around the world." The Economist, July 28, 2012 Which principle is The Economist relying on when using the Big Mac to value exchange rates? A) interest rate parity B) market price parity C) purchasing power parity D) exchange rate parity