Which of the following is the Fed's best strategy for dealing with demand shocks?
a. Maintain a money supply target
b. Decrease the money supply
c. Maintain a passive monetary policy
d. Neutralize the impact with an increase in the money supply
e. Increase the interest rate
D
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Inelastic demand implies
A) that a one percent increase in price results in a smaller than one percent decrease in quantity demanded. B) that a one percent increase in price results in a larger than one percent decrease in quantity demanded. C) that a one percent cut in price results in a larger than one percent increase in quantity demanded. D) that a one percent decrease or increase in price induces no change in total revenue.
Which of the following pairs is most likely to represent substitute goods?
a. Hamburgers and hamburger rolls. b. Movies and popcorn. c. Beer and pretzels. d. Shoes and shoelaces. e. Pork and beef.