If the Fed wants to fight inflation, it will ________ the federal ...

[michelleunicorn]

If the Fed wants to fight inflation, it will ________ the federal funds rate in order to ________.
 
  A) raise; decrease aggregate supply
  B) raise; increase aggregate supply
  C) raise; decrease aggregate demand
  D) lower; decrease aggregate demand
  E) lower; increase aggregate supply

Question 2

Refer to Figure 7.1. Suppose that instead of 350, Angus earns only 250 by playing the bagpipes, but all other earnings remain the same.
 
  Also, suppose the city passes an ordinance banning loud music, and this directly impacts Angus's legal ability to play his bagpipes. In this case, the Coase theorem predicts that A) Dudley will pay Angus to not play the bagpipes.
  B) Angus will pay Dudley so Angus can play the bagpipes.
  C) Dudley will do nothing and Angus will mop floors.
  D) no bargain can be reached between Angus and Dudley.

[deja]

Answer to Question 1

C

Answer to Question 2

D

[michelleunicorn]

Gracias!

[peter]

Excellent