-In the above figure, while moving along the line showing the relationship between household income and expenditure
A) household expenditures are held constant.
B) household income is held constant.
C) the interest rate is held constant.
D) no variable is held constant.

Question

-In the above figure, while moving along the line showing the relationship between household income and expenditure
A) household expenditures are held constant. 
B) household income is held constant. 
C) the interest rate is held constant. 
D) no variable is held constant.

Quizplus · Accepted Answer

When moving along a line that shows the relationship between household income and expenditure, it is typically assumed that other factors, such as the interest rate, are held constant to isolate the effect of income changes on expenditure.

-In the Above Figure, While Moving Along the Line Showing