Which of the following statements is not correct?
A)A reduction in money income will shift the budget line to the right.
B)A reduction in money income accompanied by an increase in product prices will necessarily shift the budget line to the left.
C)An increase in product prices will shift the budget line to the left.
D)An increase in money income will shift the budget line to the right.

Question

Quizplus · Accepted Answer

A reduction in money income results in a decrease in purchasing power, which would shift the budget line to the left, not to the right. This is because with less income, consumers can afford fewer goods and services at the same prices.

Which of the Following Statements Is Not Correct