An autonomous monetary policy easing ________ real interest rates and ________ output in the short run, thereby ________ stock prices

Suppose the government imposes an 8 percent sales tax on clothing items and the tax is levied on sellers. Who pays for the tax in this situation? (Assume that the demand curve is downward sloping and that the supply curve is upward sloping.)

A) The sellers will pass on the entire sales tax to consumers and therefore the consumers bear the tax. B) The tax will be borne partly by consumers and partly by sellers. C) It is not possible to answer the question without information on price elasticities. D) The tax is borne entirely by the sellers.

Suppose the Fed is targeting real GDP. If the interest rate is below its forecast and the Fed is convinced that this is due to commodity demand instability, it will ________ the money supply, which turns out to be exactly the wrong thing to do if the

low interest rate is in fact due to ________ money demand. A) raise, high B) raise, low C) lower, high D) lower, low