Points below the production possibilities frontier are inefficient because it is possible to make someone better off without making anyone else worse off.

The supply of a good is a function of price and the demand for the good

Indicate whether the statement is true or false

Assume that the Fed is targeting interest rates. If a desirable new type of bank deposit increases the demand for money at a given level of income and the rate of interest, then

a. shocks to money demand will affect income. b. a negative shock to money demand will not affect income. c. inflation will decrease as the money supply decreases. d. both a and c. e. None of the above