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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A strategy that limits defection in a repeated prisoner's dilemma game is:
A. a tit-for-tat strategy. B. an ultimatum bargaining game. C. a Nash equilibrium. D. a cartel.
From 1970 to 2006, the largest percentage increase in average real income for households in the United States occurred in which quintile?
A) the bottom quintile B) the second quintile C) the middle quintile D) the top quintile
Following mergers that raised the market shares of two airlines to 79 and 82 percent, respectively, of traffic in their hub cities, prices of service rose and the quantities of service fell, even though in most other markets prices fell and quantities increased. The result suggests that these markets
a. were contestable. b. were monopolized. c. become more competitive due to oligopolistic rivalries. d. had no barriers to entry.
The price elasticity of demand for a variable input will be more elastic in all the following cases EXCEPT
A) the greater the price elasticity of demand for the final product. B) the easier it is for a particular variable input to be substituted for by other inputs. C) the larger the proportion of total costs accounted for by a particular variable input. D) the shorter the time period being considered.