Refer to Figure 10.1. When each player plays his or her dominant strategy, society is poorer and the payoffs are smaller by ________ units than if each player had played the strategy with the ideal outcome for both the individual players and for the
group as a whole. A) 6
B) 12
C) 18
D) 30
C
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If total planned spending (E(p)) exceeds GDP, we expect that
A) inventories will be falling. B) inventories will be rising. C) GDP will be falling. D) government expenditures must be rising.
A theory is:
a. based only on critical factors or variables. b. a simplified abstraction of the real world. c. a detailed description of reality. d. a and b.
What happened to the international gold standard during WWI?
A) It flourished, since no nation trusted the other nations' currencies. B) It was abandoned. C) It did not disappear but was weakened by a major decline in international trade. D) It was relegated to government control.
The self-correcting tendency of the economy means that rising inflation eventually eliminates:
A. unemployment. B. exogenous spending. C. recessionary gaps. D. expansionary gaps.