Starting from potential output, if consumer confidence decreases and consumers decide to spend less, then this will generate a(n) ________ gap and inflation will ________.

Hyperinflation

A) occurs in the United States during each business cycle. B) has never occurred in the United States. C) is a period of time when inflation exceeds 20 percent per year. D) happens in all countries at some time during their business cycle. E) occurs only in theory, never in reality.

Firms A and B can conduct research and development (R&D) or not conduct it. R&D is costly but can increase the quality of the product and increase sales

The payoff matrix is the economic profits of the two firms and is given above, where the numbers are millions of dollars. A's best strategy is to A) conduct R&D regardless of what B does. B) not conduct R&D regardless of what B does. C) conduct R&D only if B conducts R&D. D) conduct R&D only if B does not conduction R&D.