When there is an expansionary gap, inflation will ________, in response to which the Federal Reserve will ________ real interest rates, and output will ________.

Under current tax law individuals do not pay taxes on health insurance benefits they receive from their employers. As a result

A) the quality of health care provided is less than it would be if benefits were taxed. B) politicians are encouraged to raise income and payroll taxes. C) individuals are encouraged to want generous health coverage that reduces their incentives to cut costs. D) the federal government spends more than it receives in tax revenue.

People are sometimes seen to give up money to make an allocation more fair. What experiment could be used to determine if this is because people truly care about fairness or because people want to avoid the consequences of others' spite?

a. The Ultimatum Game could be run to see if an even split is proposed. b. The Dictator Game could be run to see if an even split is proposed. c. The Battle of the Sexes could be run to see if players choose the rival's preferred outcome. d. The repeated Prisoners Dilemma could be run to see if players can tacitly collude on Silent.