If money income is reduced by half, and the prices of all goods consumed by the household are reduced by half, the household's budget line will
A) become steeper.
B) become flatter.
C) shift outward.
D) shift inward.
E) not change.

Question

Quizplus · Accepted Answer

If both money income and prices of all goods are reduced by the same proportion, the relative prices of goods will remain the same and the budget line will not change.

If Money Income Is Reduced by Half, and the Prices