Based on the anchoring effect, a seller has an incentive to plant a relatively ________ number in the buyer's head, and a buyer has an incentive to plant a relatively ________ number in the seller's head.

Monetary policy will be

a. less effective the higher the interest elasticity of investment, and thus the steeper the IS schedule. b. more effective the higher the interest elasticity of investment, and thus the flatter the IS schedule. c. equally effective regardless of whether or not the interest elasticity of investment is higher or lower, or the IS curve is flatter or steeper. d. more effective with a vertical IS curve.

Which of the following can tax cuts influence?

a. Aggregate demand b. Aggregate supply c. Investment spending d. All of the above