The idea that nominal interest rates rise or fall one-for-one with expected inflation is known as

Refer to Figure 18-1. Area B + C represents

A) the portion of sales tax revenue borne by consumers. B) the portion of sales tax revenue borne by producers. C) the excess burden of the sales tax. D) sales tax revenue collected by the government.

It is often reported by financial news reports that higher interest rates reduce automobile sales. If this is true, we can expect

a. fiscal policy to be more effective. b. both fiscal and monetary policy to be more effective. c. monetary policy to be more effective. d. neither fiscal nor monetary policy to be more effective.