When there is an expansionary gap, inflation will ________, in response to which the Federal Reserve will ________ real interest rates, and output will ________.
A. decline; lower; expand
B. increase; raise; decline
C. decline; lower; decline
D. decline; raise; decline
Answer: B
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Refer to the figure below. Player A can infer that Player B will: 
A. Player A cannot infer anything about what Player B will do given this matrix. B. choose Right. C. choose Left when A chooses Up and choose Right when A chooses Down. D. choose Left.
A firm is employing capital and labor such that the marginal product of capital is 30 and the marginal product of labor is 10
If the price of a unit of capital is $50 and the price of a unit of labor is $10, is the firm minimizing its costs? If not, can you recommend a change for the firm to make in its relative amounts of labor and capital used? Explain.
With respect to health care decisions, which party is the "third" party?
A. The doctor B. The federal regulator C. The health insurance company D. The patient
A single firm that charges the monopoly price in the market earns $800. If another firm successfully enters the market, the incumbent's profits fall to $500 and the entrant earns $450. If the incumbent engages in limit pricing, its profits are $600. For what interest rate, i, is limit pricing a profitable strategy for the incumbent?
A. i > 1.5 B. 0.5 < i < 1.0 C. i < 0.5 D. 1.0 < i < 1.5