A consumer consumes two normal goods, popcorn and Pepsi. The price of Pepsi rises. The substitution effect, by itself, suggests that the consumer will consume

If the federal funds rate is __________ the equilibrium interest rate, banks would try to __________ in the federal funds market

A) above; borrow B) below; lend C) below; borrow D) None of the above.

When a new discount retailer, like Wal-Mart, opens a store, people save money. The CPI

a. completely ignores this b. accounts for every implication of this c. misses the reduction in what people pay when they shift but captures the effect from that point on. d. does not count sales at discount stores. e. misses the reduction in what people pay only for stores in mid-sized cities.