The subgame-perfect equilibrium of a two-stage game in which firms first choose capacities and then engage in a Bertrand price setting game resembles the equilibrium in:

If the cross-price elasticity of demand between two goods is positive, we can assume that the two goods in question are:

A) complements. B) substitutes. C) inferior goods. D) totally unrelated to one another.

If the Federal Reserve unexpectedly increases the money supply, which of the following will most likely happen in the short run?

a. real GDP will rise. b. real GDP will fall. c. real interest rates will rise. d. the budget deficit will rise.