D.  Overstates the actual multiplier because it excludes leakages in domestic spending from the purchase of imports or the paying of taxes

Suppose that there is a positive aggregate demand shock and the central bank commits to an inflation rate target. But if the commitment is not credible, then

A) the public's expected inflation will remain unchanged. B) the short-run aggregate supply curve will rise. C) over time inflation will fall back down to the inflation target. D) all of the above. E) both A and B.

If goods X and Y are such that the cross price elasticity between them is negative, and if the income elasticity of X is negative, then these goods are

a. inferior complements b. luxury complements c. income elastic substitutes d. normal substitutes e. income elastic complements