Answer Happy

QUESTION 11 An aide to a U.S. Congressman computes the effect on aggregate demand of a $20 billion tax cut. The actual increase in aggregate demand is less than the aide expected. Which of the following errors in the aide's computation would be consistent with an overestimation of the impact on aggregate demand? O a. The increase in income resulted in investment rising more than the aide had anticipated. Ob. The increase in income shifted money demand less than the aide had anticipated. Oc. The aide thought the tax cut would be permanent, but the actual tax cut was temporary Od. The actual MPC was larger than the MPC the aide used to compute the multiplier. QUESTION 12 If the interest rate decreases a or if the price level decreases, then people will want to hold more money b.or if the price level decreases, then people will want to hold less money, c or if the price level increases, then people will want to hold more money. d. or if the price level increases, then people will want to hold less money, QUESTION 13 When the interest rate decreases, the opportunity cost of holding money a increases, so the quantity of money demanded decreases. O b.increases, so the quantity of money demanded increases. Oc decreases, so the quantity of money demanded increases Od decreases, so the quantity of money demanded decreases