2. Explain the role of required & excess reserves in the banks approach to the making of loans to the consumer & busines
1 answer:
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Answer:
C. have a zero slope up to $400 and then have a negative slope.
Explanation:
Here in the attached diagram
H denotes the individual income
H = Services of the healthcare
G = Other goods
As it can be seen that the ABC is the budget line and the budget line is horizontal till $400 i.e. zero slope and afterwards it would be downward sloping i.e. negative slope
In the case when the income is fully spend on the other goods so an individual after that can consume $400 due to which the budget line could be horizontal and become parallel to the axis
Therefore the correct option is C.
