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What Would Happen to the Budget Line If Income Increases

Question 16

Multiple Choice

What would happen to the budget line if income increases by the same percentage as the price of the two goods decreases (that is income up by, say, 10 percent and the prices down by 10 percent) ?


A) A rightward parallel shift in the budget line
B) A leftward parallel shift in the budget line
C) An upward pivot of the budget line
D) The budget line is unaffected

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