Holding all else equal, indicate how each of the following changes would affect a budget constraint that limits consumption of goods (Y) and services (X). Explain your answer.
A. Deflation that uniformly drops the price of all goods and services.
B. Inflation that consistently increases the price of all goods and services.
C. Technical change that reduces the price of goods, but leaves the price of services unchanged.
D. Economic growth that boosts the level of disposable income.
E .Government-mandated health care coverage for workers that boosts the price of goods by 3% and increases the price of services by 5%.

  • CreatedFebruary 13, 2015
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