The Keynesian-cross model suggests that increased saving increases the economy's output

Figure 7-7

In the price range between $3 and $4, the price elasticity of the demand curve depicted in is
a.
highly elastic.
b.
approximately equal to -0.33.
c.
approximately equal to -3.
d.
of unitary elasticity.

The Fed can decrease the federal funds rate by

A. Simply announcing a lower rate because the Fed has direct control of this interest rate. B. Selling government bonds. C. Buying government bonds, which causes market interest rates to fall. D. Changing the money multiplier.