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

A competitive market is in equilibrium. Then there is a decrease in demand and a decrease in supply. The equilibrium price ________, and the equilibrium quantity ________

A) rises; decreases B) perhaps changes but we can't say if it rises, falls, or stays the same; decreases C) falls; increases D) perhaps changes but we can't say if it rises, falls, or stays the same; increases E) rises; increases

Knowledge capital is nonrival in the sense that

A) firms do not compete to be the first to develop new technologies. B) two people can use the same knowledge to develop and produce a product. C) no single company can be excluded from the benefits of new technologies. D) firms can benefit from the research and development of rival firms without paying for that benefit.