Suppose the demand function for cable TV service is given by QCTV = 15 - 0.25 × PCTV + 0.0005 × M + 0.3 × PSTV, where QCTV is the quantity of cable TV demanded (thousands of households), PCTV is the price of cable TV, M is income and PSTV is the price of satellite TV service. We can see that:

An aggregate supply curve may be horizontal over some range because within that range

A) a higher price level leads to higher interest rates, which reduce the money supply and consumer spending B) changes in the aggregate price level do no induce substitution C) output cannot be increase unless prices and interest rates increase D) rigid prices prevent employment from fluctuating E) resources are underemployed and an increase in demand will be satisfied without any pressure on the price level

In Keynes's liquidity preference framework

A) the demand for bonds must equal the supply of money. B) the demand for money must equal the supply of bonds. C) an excess demand of bonds implies an excess demand for money. D) an excess supply of bonds implies an excess demand for money.