Answer to Question #53245 in Macroeconomics for EMMA

Question

If the price of the good represented on the Y axis increases by 15 percent, that represented on the X axis increases by 5 percent and nominal income increases by 10 percent.

A The budget constraint will shift inward and become flatter
B The budget constraint will shift inwards and become steeper
C The budget constraint will rotate and become flatter
D The budget constraint will rotate and become steeper

Answer 1

D The budget constraint will rotate and become steeper