In a two-year period,suppose Gloria has $10,000 in income in year 1 and $4,300 in income in year 2.In order to maintain her optimal consumption of $8,000 in year 1 and $6,500 in year 2,she can borrow or lend at a rate of 10 percent.If Gloria's income stream changes such that she earns $3,000 in Year 1 and $12,000 in Year 2,the budget line will:
A) shift out away from the origin.
B) pivot about the endowment point.
C) pivot about the intercept on the axis representing year 2 income.
D) remain unchanged.
Correct Answer:
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