-In the above figure if money income increases, the budget line
A) shifts outward and its slope does not change.
B) shifts inward and its slope does not change.
C) rotates outward and becomes steeper.
D) rotates outward and becomes more shallow.

Question

-In the above figure if money income increases, the budget line
A) shifts outward and its slope does not change. 
B) shifts inward and its slope does not change. 
C) rotates outward and becomes steeper. 
D) rotates outward and becomes more shallow.

Quizplus · Accepted Answer

When money income increases, the budget line shifts outward parallel to the original line, indicating that the consumer can now afford more of both goods. The slope remains unchanged because the relative prices of the goods have not changed.

-In the Above Figure If Money Income Increases, the Budget