The "principle of rival consumption" applies to which of the following?

Which statement most nearly describes a Nash equilibrium applied to price competition?

A) Two firms cooperate and set the price that maximizes joint profits. B) Each firm automatically moves to the purely competitive equilibrium because it knows the other firm will eventually move to that price anyway. C) Given the prices chosen by its competitors, no firm has an incentive to change their prices from the equilibrium level. D) One dominant firm sets the price, and the other firms take that price as if it were given by the market.

Low rates of inflation are generally associated with

a. low rates of government spending. b. small or nonexistent government budget deficits. c. low rates of productivity growth. d. low rates of growth of the quantity of money.