Once the state environmental protection agency devises its new policy to protect the environment, firms decide whether to remain in the state or move their operations to a neighboring state. In the language of game theory, this is an example of:

In the long run, an increase in the growth rate of the money supply causes the inflation rate to ________, which then causes the nominal interest rate to ________

A) increase; increase B) increase; decrease C) decrease; increase D) decrease; decrease

Consider the same monopoly situation as in the previous question. The firm's profit will be

a. 1,760 b. 1,660 c. 2,264 d. 6,728