Monetary policy refers to the actions the Federal Reserve takes to manage
A) the money supply and income tax rates to pursue its economic objectives.
B) government spending and income tax rates to pursue its economic objectives.
C) income tax rates and interest rates to pursue its economic objectives.
D) the money supply and interest rates to pursue its economic objectives.
D
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Consider a downward-sloping demand curve. When the price of a normal good increases, the income and substitution effects
A) work in the same direction to increase quantity demanded. B) work in the same direction to decrease quantity demanded. C) work in opposite directions and quantity demanded increases. D) work in opposite directions and quantity demanded decreases.
If the price elasticity of demand for a good is greater than one in absolute value, economists characterize that demand is
A) elastic. B) inelastic. C) perfect. D) vertical.