Which of the following statements sums up the arms race?
a. The dominant strategy for each nation was to spend less on arms.
b. Each country’s dominant strategy led to an inferior outcome for the world.
c. Self-interest drove each country into a cooperative game.
d. Each country’s dominant strategy led to a safer outcome for the world.
b. Each country’s dominant strategy led to an inferior outcome for the world.
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Creative destruction refers to the process where
a. new products and methods of production are continuously replacing old ones b. producing more of one good causes you to produce less of another c. everybody involved is made worse off d. new ways to destroy buildings are employed
Economists believe that people are:
A. always risk-seekers. B. always risk-averse. C. generally risk-averse. D. generally risk-seekers.
Which of the following claims concerning the importance of effects that explain the slope of the U.S. aggregate-demand curve is correct?
a. The exchange-rate effect is relatively small because exports and imports are a small part of real GDP. b. The interest-rate effect is relatively small because investment spending is not very responsive to interest rate changes. c. The wealth effect is relatively large because money holdings are a significant portion of most households' wealth. d. None of the above is correct.
When the Fed buys a security from a financial firm and the financial firm agrees to buy back the security the next day, the transaction is known as
A) a repurchase agreement. B) a reverse repurchase agreement. C) an open market flip-flop. D) a federal funds swap.