If Logan received a $2,500 bonus and his MPS is 0.20, his consumption rises by $________ and his saving rises by $________.

Using aggregate supply and demand curves drawn according to the Keynesian view, which of the following will occur if the Fed buys bonds in the open market and the economy is below full employment?

A. Aggregate demand will shift to the left and the unemployment rate will rise. B. Aggregate demand will shift to the right and the unemployment rate will fall. C. Aggregate demand will shift to the left and the price level will remain unchanged. D. Aggregate demand will shift to the right and the price level will fall.

The theory by which people optimally use all available information when forecasting the future is known as

a. rational expectations. b. perfect expectations. c. credible expectations. d. predictive expectations.