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The Two-Period Budget Line for Incomes Y1 and Y2 and Consumption

Question 16

Multiple Choice

The two-period budget line for incomes Y1 and Y2 and consumption C1 and C2 can be written as C2=Y1(1+r) +Y2(1+r) C1C _ { 2 } = Y _ { 1 } ( 1 + r ) + Y _ { 2 } - ( 1 + r ) C _ { 1 } ,if the interest rate were to fall the budget line would


A) shift to the left in a parallel fashion
B) shift to the right in a parallel fashion
C) rotate counter-clockwise pivoting on Y1,Y2
D) rotate clockwise pivoting on Y1,Y2

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