The ________ problem of discretionary policy arises because economic behavior is influenced by what firms and people expect the monetary authorities to do in the future

If government spending rises but the central bank changes the money supply to prevent income from changing, then

a. both consumption and investment will remain unchanged. b. consumption rises and investment falls. c. investment falls but consumption rises. d. both consumption and investment rises.

Opportunity cost is the value of

A) the best (or most highly valued) forfeited alternative. B) the chosen alternative. C) a free good. D) all forfeited alternatives.