The income effect measures how
a. the quantity of a good supplied changes in response to a change in income
b. the quantity of a good demanded changes in response to a change in the price of a good, with income constant
c. far the budget line shifts due to a change in income
d. the quantity of a good demanded changes in response to a change in purchasing power
e. income changes when prices change, holding quantities demanded constant
D
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One of the factors that contributed to the success German policymakers had using a monetary targeting type policy starting in the mid-1970s and continuing through the next two decades was that
A) they used a rigid target for the money growth rate. B) they implemented policy so their inflation rate goal was met in the short run. C) the money target was flexible to allow the Bundesbank to concentrate on other goals as needed. D) they rarely communicated the intentions of policy to the public in order to keep the public from panicking.
If some piece of information causes buyers to expect the price of a good to rise in the future, but sellers take the same information and believe it will have no impact on price, the result is
a. a decrease in supply today b. an increase in supply today c. a decrease in quantity demanded today d. an increase in demand today e. an increase in quantity demanded today