You consume only steak and lobster. Your income effect from a drop in the price of lobster is measured by a movement along your indifference curve between steak and lobster

What are the problems with government actions in DVC?

What will be an ideal response?

Because of their effect on interest rates,

A. capital flows weaken monetary policy but strengthen fiscal policy. B. capital flows strengthen monetary policy but weaken fiscal policy. C. the initial effects of a fiscal expansion on aggregate demand are strengthened. D. the initial effects of a monetary contraction are weakened.