Refer to the above figure. The figure represents the consumption function for a consumer. Point B represents

The bonus of a plant manager in a vertically integrated firm is based on the following formula:

Bonus = 10,000 - 0.5(Qf - Q) where Qf is feasible production and Q is actual production. The value for Qf is provided by the plant manager at the beginning of the year. With this scheme, the plant manager has an incentive: A) to underestimate Qf. B) to overestimate Qf. C) to reveal the true Qf and make Q as small as possible. D) to reveal the true Qf and make Q as large as possible.

Which of the following determines how much money an individual will decide to hold?

a. Investment spending b. Income taxes c. The price level d. The supply of money e. Real GDP