During which decade did the original Phillips curve break down? Also, briefly explain why the original Phillips curve broke during this period
What will be an ideal response?
The original Phillips curve broke down in the United States in the 1970s. First, the United States was affected by oil shocks that would cause an increase in both inflation and the unemployment rate. Second, individuals changed the way they formed expectations of prices. Rather than assume that this year's price level would be equal to last year's price level (i.e., zero expected inflation), individuals started to assume that previous inflation would persist.
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Refer to the figure below. 
When Row Resorts and Column Cruises both play their dominant strategy:
A. Row Resorts earns a higher profit than does Column Cruises. B. both firms do better than if they had both played their dominated strategy. C. Column Cruises earns a higher profit than does Row Resorts. D. both firms do worse than if they had both played their dominated strategy.
A closed economy is one that
a. uses tariffs. b. uses quotas to restrict trade. c. uses exchange controls. d. does not trade with other nations.
Suppose the United States exports cars to France and imports cheese from Switzerland. This situation suggests that
a. the United States has a comparative advantage relative to Switzerland in producing cheese, and France has a comparative advantage relative to the United States in producing cars. b. the United States has a comparative advantage relative to France in producing cars, and Switzerland has a comparative advantage relative to the United States in producing cheese. c. the United States has an absolute advantage relative to Switzerland in producing cheese, and France has an absolute advantage relative to the United States in producing cars. d. the United States has an absolute advantage relative to France in producing cars, and Switzerland has an absolute advantage relative to the United States in producing cheese.
An increase in the budget deficit causes domestic interest rates
a. and investment to rise. b. to rise and investment to fall. c. to fall and investment to rise. d. and investment to fall.