Government spending is a leakage out of the circular flow of income and spending

The income elasticity of demand for food

A) does not change when an individual's income changes. B) increases as an individual's income increases. C) decreases as an individual's income increases. D) is negative.

The Fed can surely reduce the rightward shift of the AD curve, but

a. stock and bond prices may fall dramatically b. inflation may rise sharply c. inflation would change in an unpredictable fashion d. recession may result e. unemployment may fall to below the natural rate