A tax on an imported product is called a

Suppose that there is a negative aggregate supply shock and the central bank commits to an inflation rate target

A) If the commitment is credible, the public's expected inflation will remain unchanged. B) Credible policy produces better outcomes on both inflation and output in the short run. C) Policies that are not credible produce worse economic contraction. D) all of the above. E) both A and C.

The rate at which a consumer is willing to give up consumption in one period for additional consumption in another is known as ________

A) the marginal propensity to save B) the marginal propensity to consume C) the marginal rate of substitution D) the average propensity to consume