Crowding in occurs when government spending improves business expectations about the future and leads to higher business investment spending

If the central bank is facing the zero bound constraint and announces a higher inflation target,

A) the real interest rate will increase, which will decrease aggregate expenditure. B) the real interest rate will decrease, which will increase aggregate expenditure. C) the nominal interest rate will increase, which will decrease aggregate expenditure. D) the nominal interest rate will decrease, which will increase aggregate expenditure.

Over a ten year period, the monthly charge for cellular phone service decreased from $120 per month to $30 per month. At the same time, the number of subscribers increased from less than 10 million to more than 75 million. Which of the following provides the best explanation for these changes?

a. An increase in consumer income over this ten year period b. A reduction in the price of residential phone service, a substitute for cellular phone service c. An increase in the wages of workers in the cellular phone industry d. Technological improvements that reduced the cost of supplying cellular phone service