not sure if I got this right.. double checking please help To simplity our consu

Question

not sure if I got this right.. double checking please help

To simplity our consumption models, suppose U.S. consumers only purchase food and all other goods where food ts ploted along the horzontal axcis of the indifterence map if the US Congress passes an economic stimulus package that pays $300 to each person, how does this affect the budget line for each consumer? O A. Parallel outward (rightward) shim O B. Parallel inward (leftward) shin ? c. Makes the budget line steeper 0 D. Makes the budget line natter O E. none of the above Click to select your answer 247 ?

Explanation / Answer

Yes you got this right. Ans is A. Parallel outward (rightward) shift.

For other question related to this topic

To simplify our consumption models, suppose U.S. consumers only purchase food and all other goods where food is plotted along the horizontal axis of the indifference map. Also, suppose that all states initially impose state sales taxes on all goods (including food), but then the states exempt food from the state sales tax. How does this tax policy change alter the consumer's budget line?

Ans is Makes the budget line flatter

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