The effect on the budget line of an equal percentage increase in prices and income due to inflation is

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    uncertain: more information about the income, prices and the inflation rate is needed to answer this question.
     none: The budget line does not shift or rotate under this scenario.
     that the budget lines shift parallel out from the origin with the increase in income, by not by as much as if prices had remained constant.
     that the budget lines shift parallel in towards the origin with the increase in income, by not by as much as if income had remained constant.
asked Jun 2, 2013 in Economics by anonymous
    

1 Answer

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none: The budget line does not shift or rotate under this scenario.
answered Jun 3, 2013 by Xyz ~Expert~ (3,650 points)

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