If consumption is $750 when real disposable income is $1,000, the average propensity to consume is

If the price of inputs rises and personal income taxes rise:

a. Aggregate demand rises, but aggregate supply does not change. b. Aggregate demand falls and aggregate supply rises. c. Aggregate demand rises and aggregate supply rises. d. Aggregate demand falls and aggregate supply falls. e. Neither the aggregate demand nor the aggregate supply change.

Which of the following is FALSE?

A. The classical economists relied on market forces to create full employment. B. Keynes advocated an active government role for curing a recession. C. Keynes suggested that full employment was a "rare and short-lived occurrence". D. The classicals believed demand created its own supply.