An increase in demand and a decrease in supply cause which of the following?

In Figure 13-2 above, suppose that the Fed maintains a constant interest rate, commodity prices are fixed, and that commodity demand is unstable ranging from IS0 to IS1. Equilibrium real output would then range from

A) A0 to A1. B) B0 to B1. C) C0 to C1. D) Insufficient information.

We should expect the consumption function to shift downward if

a. real interest rates rise. b. price levels fall. c. consumers become more optimistic about future incomes. d. consumers become more pessimistic about future incomes.