A decrease in the price of inputs shifts the AS curve to the left.

One problem with the ripple effect from the Fed's monetary policy is

A) the fact that the monetary policy transmission process is long and drawn out. B) that changing the Federal funds target rate seldom has an effect on the markets for reserves and loanable funds. C) the frequent misalignment of the spread between the Federal funds rate and the Federal funds rate target. D) that the Fed's policy sometimes has a large impact on potential GDP as well as its usual impact on aggregate demand. E) the tight relationship between that the Federal funds rate has to aggregate spending.

The effects of tax cuts or government spending dissipate and each additional change in consumption and income becomes smaller and smaller because

A) some of the increase in income will be lost through taxation. B) some of the increase is saved and does not result in an increase in consumer demand. C) some of the increase in consumption will be an additional demand for imported goods. D) All of the above. E) None of the above.