An increase in the income of a family raises the slope of the family's budget constraint.

Name: An increase in the income of a family raises the slope of the family's budget constraint.
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Question

Quizplus · Accepted Answer

An increase in the income of a family shifts the budget constraint outward, parallel to the original line, without changing the slope. The slope of the budget constraint is determined by the relative prices of the goods, not by the income level.

An Increase in the Income of a Family Raises the Slope