The Fed can use expansionary monetary policy to lower interest rates to stimulate aggregate demand
Indicate whether the statement is true or false
TRUE
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Bonnie can produce either 10 hats or 20 scarves in a month. Phil can produce either 5 hats or 10 scarves in a month. Therefore:
A) Phil has a comparative advantage in hats, Bonnie in scarves. B) Bonnie has a comparative advantage in hats, Phil in scarves. C) Phil has a comparative advantage in both hats and scarves. D) Bonnie has a comparative advantage in both hats and scarves. E) Neither of them has a comparative advantage in hats or scarves.
If taxes
a. increase, then consumption increases, and aggregate demand shifts leftward. b. increase, then consumption decreases, and aggregate demand shifts rightward. c. decrease, then consumption increases, and aggregate demand shifts rightward. d. decrease, then consumption decreases, and aggregate demand shifts leftward.