The economy pictured in the figure below has a(n) ________ gap with a short-run equilibrium combination of inflation and output indicated by point ________. 
A. recessionary; B
B. recessionary; C
C. recessionary; A
D. expansionary; A
Answer: C
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Refer to the payoffs in the table above. Sears and Wal-Mart must decide whether to lower their prices based on the profits shown in the table. This game has
A) no Nash equilibrium. B) a Nash equilibrium: Sears keeps its prices high and Wal-Mart lowers its prices. C) a Nash equilibrium: both Sears and Wal-Mart keep prices high. D) a Nash equilibrium: both Sears and Wal-Mart lower prices.
Absolute advantage is determined by
A) actual differences in labor productivity between countries. B) relative differences in labor productivity between countries. C) Both A and B. D) Neither A nor B.
Compared to stockholders, bondholders
a. face greater risk b. face the same risk c. face lower risk d. always receive a higher return on their investment e. always receive a lower return on their investment
During World War II government expenditures increased almost five-fold and output almost doubled
a. True b. False Indicate whether the statement is true or false