Suppose that last year the Consumer Price Index was 124; this year it is 130.7. What was the inflation rate between these years?

Suppose the government decided to ease monetary policy, then increase taxes. In the short run in the Keynesian model, the effect of these policies would be to ________ the real interest rate and ________ the level of output

A) lower; increase B) lower; decrease C) lower; have an ambiguous effect on D) have an ambiguous effect on; increase

Suppose two firms are in a game situation, and they each must decide on a strategy regarding whether to select a high price or a low price Profits for a firm are highest when it selects a low price, while the other selects a high price; profits are lowest if one selects a high price, while the other selects a low price; profits are in between when both select low prices; and profits are slightly higher when both select high prices. In the absence of collusion we expect

A) one of the firms to select a high price and the other a low price. B) one firm to select a high price and the other a low price in the first period, followed by a reversal in the second period. C) both to select high prices. D) both to select low prices.