Which of the following pairs of policies shift aggregate demand in the same direction?
a. A tax increase and an increase in the money supply
b. A transfer payment decrease and an increase in the money supply.
c. A reduction in government purchases and decline in the money supply.
d. An increase in government purchases and a decline in the money supply.
c
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Which of the following statements correctly differentiates between the slope of the demand curve and price elasticity of demand along a linear demand curve?
A) The price elasticity of demand for a good is the same at different points on the demand curve, whereas the slope of the demand curve varies depending on the point where it is measured. B) The price elasticity of demand for a good varies along the demand curve, whereas the slope of the demand curve remains the same at different points on the curve. C) The price elasticity of demand is a ratio, whereas the slope of a demand curve is a product. D) The price elasticity of demand is a product, whereas the slope of a demand curve is a ratio.