If Frank has been consuming 10 tacos per week at a consumer optimum, and the price of tacos falls, how will Frank respond?

According to the kinked demand curve model, an oligopolist may face

A. more elastic demand than a monopolistic competitor. B. less elastic demand than a monopolistic competitor. C. more elastic demand if she raises her price than if she lowers her price. D. less elastic demand if she raises her price than if she lowers her price.

The interest rate effect suggests that

A. an increase in the price level will, reduce interest rates, and therefore reduce consumption and investment spending. B. an increase in the price level will, increase interest rates, and therefore reduce consumption and investment spending. C. nominal interest rates do not accurately measure the yield on loans unless adjusted by use of a price index. D. a decrease in the real interest rate will stimulate consumption and investment spending and therefore inflate the price level.