Tracy and Amy are playing a game in which Tracy has the first move at X in the decision tree shown below. Once Tracy has chosen either the top or bottom branch at X, Amy, who can see what Tracy has chosen, must choose the top or bottom branch at Y or Z. Both players know the payoffs at the end of each branch.
The equilibrium to the game results in ________ for Amy and Tracy relative to what they could get if they could solve their ________.
A. lower payoffs; commitment problem
B. lower payoffs; prisoner's dilemma
C. higher payoffs; commitment problem
D. lower payoffs; credible threat
Answer: A
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If the Fed sells a T-bill to an individual rather than to a commercial bank, how will this affect the money supply?
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a. and firms paying wages above equilibrium to improve worker health both create frictional unemployment. b. creates frictional unemployment, while firms paying wages above equilibrium to improve worker health creates structural unemployment. c. creates structural unemployment, while firms paying wages above equilibrium to improve worker health creates frictional unemployment. d. and firms paying wages above equilibrium to improve worker health both create structural unemployment.