When Bono forms his future expectations for the economy using all available current data and his own judgment about future policy effects, this is known as
A. the new classical theory.
B. the policy irrelevance proposition.
C. rational expectations.
D. irrational expectations.
Answer: C
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Based on the figure below. Starting from long-run equilibrium at point C, an increase in government spending that increases aggregate demand from AD to AD1 will lead to a short-run equilibrium at point ________ creating _____gap. 
A. D; an expansionary B. B; no output C. B; expansionary D. A; a recessionary
A table that shows the possible payoffs each firm earns from every combination of strategies by all firms is called
A) a payoff table. B) an earnings table. C) a strategic matrix. D) a payoff matrix.
Which is a good example of an increase in total factor productivity?
A) a tax cut B) good weather C) a company reducing its workforce D) better credit conditions
Many wines are priced high in order to
a. Indicate low quality b. Indicate high quality c. Indicate a bargain brand d. None of the above