If the income elasticity of hamburgers is -0.8 for John, then his share of income spent on hamburgers will ________ when his income increases

In the figure above, the marginal rate of substitution (MRS) at point A is

A) greater than the MRS at any other point on the indifference curve. B) equals the MRS at all other points on the indifference curve. C) less than the MRS at any other point on the indifference curve. D) equal to the slope of the budget line.

When the economy suffers a temporary negative supply shock and the central bank responds by changing the autonomous component of monetary policy to keep inflation at the target inflation rate, then

A) aggregate output drops in the short run. B) output will return to potential output over time. C) aggregate output is stabilized. D) all of the above. E) both A and B.