Figure 11-7

For the firm in Figure 11-7, an unregulated monopolist, output falls below the efficient level in the short run by how much?

________ shifts the consumption function upward

A) A decrease in the marginal propensity to consume B) An increase in the price level C) An increase in the real interest rate D) An increase in expected future disposable income E) An increase in disposable income

Which of the following events occur when fiscal expansion is used without accommodating monetary policy?

A) Total government spending increases (or net taxes decrease). B) Total private induced spending increases. C) Private induced spending decreases. D) A and B are both correct.