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

Discretionary policy calls for continual adjustments to the money supply and is associated with the monetarist perspective.

a. true b. false

The above figure shows three possible average total cost curves

If all firms in a perfectly competitive industry each have an average total cost curve identical to ATC1, each produce 30 units, and the market price of the good is $16 per unit, then the firms A) make zero economic profit and new firms enter the market. B) make zero economic profit and no firms enter or exit the market. C) make zero economic profit and some firms exit the market. D) incur an economic loss and some firms exit the market. E) make an economic profit and new firms enter the market.