To fight a recession, the Fed can
A) raise the federal funds rate by buying securities.
B) raise the federal funds rate by selling securities.
C) lower the federal funds rate by buying securities.
D) lower the federal funds rate by selling securities.
E) lower income taxes on interest income.
C
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Jerry spends his entire income on two goods, Bran and Tea. Every month he spends half of his income on each of these goods. Jerry's income elasticity of demand for Bran is .75. What is the income elasticity of demand for Tea?
A) 1.25 B) .75 C) 1 D) Unknown with the information provided
The fraction of each added dollar of disposable income that is used for consumption is called the:
a. average propensity to consumer (APC). b. autonomous consumption rate (ACR). c. marginal consumption propensity (MCP). d. marginal propensity to consume (MPC).