The equilibrium in the prisoner's dilemma is a dominant strategy Nash equilibrium
Indicate whether the statement is true or false
TRUE
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Potential GDP measures the capacity of the economy in terms of the actual goods and services to be produced
Indicate whether the statement is true or false
If you were building a macroeconomic model that explores the effect of the aging population on the needed expenditure for Social Security and Medicare, the exogenous variable(s) would be the
A) aging population. B) needed expenditure on Social Security. C) needed expenditure on Medicare. D) needed expenditure on both Social Security and Medicare.
People are sometimes seen to give up money to make an allocation more fair. What experiment could be used to determine if this is because people truly care about fairness or because people want to avoid the consequences of others' spite?
a. The Ultimatum Game could be run to see if an even split is proposed. b. The Dictator Game could be run to see if an even split is proposed. c. The Battle of the Sexes could be run to see if players choose the rival's preferred outcome. d. The repeated Prisoners Dilemma could be run to see if players can tacitly collude on Silent.
The substitution effect and the output effect
A. work in the same direction. B. work in opposite directions. C. are independent of one another, having nothing in common. D. None of these choices are correct.