To draw your budget line between steak and lobster, all you need to know is the price of a steak and the price of a lobster

Which of the following changes would have the largest impact on the CPI?

A) a one percent increase in the cost of housing B) a one percent increase in the cost of transportation C) a one percent increase in the cost of medical care D) a one percent increase in the cost of education E) a one percent increase in the cost of apparel

Which of the following explains why the demand for loanable funds is negatively related to the real interest rate?

A) A lower real interest rate makes more investment projects profitable. B) Consumers are willing to spend less and hence save more at higher real interest rates. C) Interest rate flexibility in financial markets assures an equilibrium in which saving equals investment. D) All of the above are reasons why the demand for loanable funds is negatively related to the real interest rate.