Favored customers receive special treatment from dealers during periods of excess demand.

In the simple Keynesian model which has no taxes and a saving function which is in the form S = -80 + .20Y, a $200 increase in desired investment leads to an increase in equilibrium income of

A) $40. B) $100. C) $400. D) $1000.

If the Fed expands the money supply by $1 trillion, what will happen in the money market?

a. The equilibrium interest rate will rise, and less money will be exchanged in equilibrium. b. The equilibrium interest rate will fall, and more money will exchanged in equilibrium. c. The equilibrium interest rate will not change. d. None of the above.