If both prices increase by 10 percent and money income remains constant,the budget line for both goods in question will:

Name: If both prices increase by 10 percent and money income remains constant,the budget line for both goods in question will:
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Question

Quizplus · Accepted Answer

The slope of the budget line is determined by the ratio of the prices of the two goods. If both prices increase by 10 percent, the ratio of the two prices remains the same, and thus the slope of the budget line remains the same.

If Both Prices Increase by 10 Percent and Money Income