Which of the following events would likely cause the largest ...

[123654777]

Which of the following events would likely cause the largest increase in current consumption?
 
  A) a permanent increase in annual salary of 2000
  B) a one-time tax cut of 4000
  C) a one-time increase in income (e.g. a bonus) of 4000
  D) both B and C

Question 2

For a given nominal interest rate, a reduction in expected inflation will cause
 
  A) a reduction in the real interest rate.
  B) an increase in the real interest rate.
  C) an increase in investment.
  D) an increase in money demand.

[jsm54321]

Answer to Question 1

A

Answer to Question 2

B

[123654777]

TYSM

[DylanD1323]

Excellent