Author Question: When there is a threat of inflation in the economy, the Fed can ________ the federal funds rate so ... (Read 77 times)

sdfghj · **on:** Jun 29, 2018

When there is a threat of inflation in the economy, the Fed can ________ the federal funds rate so as to ________ aggregate demand and ________ the price level.

A) lower; increase; decrease
B) raise; decrease; increase
C) lower; increase; increase
D) raise; decrease; decrease
E) raise; increase; decrease

Question 2

Other things constant, which case would tend to reflect the highest elasticity of demand for eggs?

A) A restaurant that spends 1 of their budget on eggs
B) A restaurant that spends 2 of their budget on eggs
C) A restaurant that spends 5 of their budget on eggs
D) The question can't be answered without information on the price of eggs.