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In the Two-Period Model, a Decrease in Income in Period

Question 44

Multiple Choice

In the two-period model, a decrease in income in period 2 causes the budget constraint to


A) shift to the left in a parallel fashion.
B) shift to the right in a parallel fashion.
C) rotate in a clockwise direction along the horizontal axis.
D) rotate in a counterclockwise direction along the vertical axis.

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