Suppose that the government enacts a tax on Good X. In order to estimate the effect of the tax on the quantity demanded of a related good, Good Y, we can use the concept of the:

Explain in detail what effect a Fed purchase of bonds will have on: (1 ) the LM curve; and (2 ) the IS curve

What will be an ideal response?

In the year after the stock market crash of 1929, stock prices on average ___

a. were lower than they had been in decades. b. were lower than in 1929 but higher than in the mid-1920s. c. rebounded to a level higher than in 1929. d. cannot be reliably calculated because no buyers could be found for many stocks, and hence no prices were reported.