If the government purchases multiplier equals 2, and real GDP is $14 trillion with potential real GDP $14.5 trillion, then government purchases would need to increase by ________ to restore the economy to potential real GDP

If the nominal interest rate is 4 percent and the expected inflation rate is 1 percent, the real interest rate is

A) 3 percent. B) 5 percent. C) 4 percent. D) 1.50 percent. E) 0.25 percent.

Refer to Figure 8.11. If Fred's profit in the top rectangle were 1,300 instead of 500, then the path of the game would be:

A. Fred chooses a small quantity and Barney enters. B. Fred chooses a large quantity and Barney enters. C. Fred chooses a small quantity and Barney stays out. D. Fred chooses a large quantity and Barney stays out.