Refer to the payoff matrix. Suppose that Speedy Bike and Power Bike are the only two bicycle manufacturing firms serving the market. Both can choose large or small advertising budgets. If this is a repeated game, it is in the long-term best interests of both players to:
A. compete, attempting to maximize their own payoffs each time the game is played.
B. agree to cooperate, but then cheat on the agreement.
C. agree to cooperate and then follow through on the agreement.
D. match the advertising behavior of the other player each time the game is played.
C. agree to cooperate and then follow through on the agreement.
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Comparing the AS-AD model and the Phillips curve, we see that
A) they both are graphed as a relationship between the rate of inflation and the unemployment rate. B) the AS-AD model uses the price level and the Phillips curve uses the rate of inflation. C) the AS-AD model is graphed as a relationship between the inflation rate and the rate of real GDP. D) the AS-AD model uses the price level and the Phillips curve uses real GDP. E) the Phillips curve is graphed as a relationship between the price level and the unemployment rate.
Other things constant, the quantity theory of money concludes that any increase in the quantity of money
A) decreases the demand for money. B) decreases in the aggregate price level. C) decreases the aggregate level of nominal income. D) proportionally increases the price level.
In the long run, a country will experience an increasing standard of living only if it experiences
A) a high rate of consumption. B) a slow rate of population growth. C) continuous technological change. D) a high rate of labor force growth.
The United States abandoned the ________ because the government wanted to rapidly expand the money supply in response to the Great Depression
A) managed float B) floating exchange rate system C) Bretton Woods system D) gold standard