Think in terms of the consumer. A shortage of a good exists when
a. demand is greater than supply
b. the quantity supplied is greater than the quantity demanded
c. the quantity demanded is greater than the quantity supplied
d. supply is greater than demand
e. the price is at its equilibrium level, but the quantities bought and sold are not equal
C
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An increase in expected future disposable income ________ consumption expenditure and ________
A) increases; shifts the consumption function downward B) increases; shifts the consumption function upward C) decreases; shifts the consumption function upward D) increases; results in a movement upward along the consumption function E) decreases; shifts the consumption function downward
Refer to Table 15-4. Suppose the following table illustrates the values of real and potential GDP and the price level if the Fed does not vote to change their current policy to be more contractionary or expansionary
If the Fed wants to keep real GDP at its potential level in 2017, should the Fed use a contractionary or expansionary policy? How should it conduct open market operations to achieve its goal?