Assume two nations are involved in an arms race. They both assume that each faces two choices – sign disarmament accord or continue with military expansion and the building of more nuclear missiles
Explain using the prisoner's dilemma model why both of these nations will choose to escalate the arms race rather than choose bilateral disarmament. During the Cold War President Ronald Reagan was quoted as saying that the United States will "trust, but verify" when discussing nuclear nonproliferation agreements between the U.S. and the Soviet Union. How does this relate to your answer to the first part of this question?
Neither nation can be certain that the other one will remain faithful to such an agreement; therefore, they both incline towards military expansion. President Reagan's comment implies that he agrees with this problem of faithfulness but believes a solution might be inspection by the other nation.
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All of the following increase labor productivity except _________
A. the accumulation of skill and knowledge B. an increase in capital per hour of labor C. an increase in consumption D. the employment of a new technology
Spending a lot on advertising is a credible signal because it:
A. conveys the firm's confidence in the high quality of their product. B. persuades the consumer to perceive high quality of a product, even if it doesn't exist. C. conveys the firm's confidence in its ability to convince the consumer to buy. D. None of these explains why advertising can be a credible signal.
The McDonald's restaurants in Russia grow their own potatoes to guarantee that they are grown correctly. Growing potatoes is very different from running a fast-food restaurant. One could say of McDonald's decision to grow its own potatoes for the Russian franchise that
a. the bounded rationality criterion outweighs the need for quality control b. the bounded rationality criterion is outweighed by the need for quality control c. both bounded rationality and the need for quality control are factors that make it rational for McDonald's to grow its own potatoes d. growing potatoes is irrational e. there must not be many potato suppliers in Russia
The federal government debt as a percentage of GDP did not rise
A) during the Great Depression. B) during World War II. C) during the 1960s. D) during the 1980s.