Higher interest rates increase both consumption and investment spending

Suppose a drought increased the price of corn by 25 percent while it decreased the quantity by 50 percent. The price elasticity of demand equals

A) 2.00. B) 0.50. C) 20.0. D) zero.

If private investment of $100 is added to the economy, the equilibrium levels of income and consumption will change in which of the following ways?

A) Increase/Decrease B) Increase/Increase C) Increase/No change D) No change/Increase E) No change/No change