During the winter of 2011-2012, the price of fuel oil increased enormously but the quantity demanded decreased only a little. This response indicates that the demand for fuel oil was

Refer to the above figure. Which panels could represent the situation if the Fed had engaged in open market operations?

A) Panels A and B B) Panels A and C C) Panels B and C D) Panels C and D

Which of the following best explains why high marginal tax rates retard output?

a. High marginal tax rates reduce the incentive to earn, invest, and use resources efficiently. b. High marginal tax rates will encourage foreign investment. c. High marginal tax rates will reduce budget deficits and lower interest rates. d. High marginal tax rates encourage people to substitute more-desired nondeductible goods for less-desired tax-deductible goods.