In the long run, a year-long drought that destroys most of the summer's wheat crops causes permanently:
A. higher prices.
B. lower prices.
C. lower output.
D. None of these is true.
Answer: D
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The reason that the prisoner's dilemma presents a dilemma is that:
A. each player has an incentive to play his or her dominated strategy, but when both choose the dominated strategy each player has a lower payoff than if they both had chosen the dominant strategy. B. the market cannot be in equilibrium because the players do not have dominant strategies. C. neither player has a comparative advantage, so neither can infer what the other player will choose. D. each player has an incentive to play his or her dominant strategy, but when both choose the dominant strategy each player has a lower payoff than if they both had chosen the dominated strategy.
From the late 1960s to the late 1990s, the share of GDP devoted to government purchases
A) drifted gradually upward. B) drifted gradually downward. C) remained fairly steady. D) increased, but only after the onset of a war or a military buildup.
On the books of the Fed the difference between borrowed reserves and discount loans is equal to
A) excess reserves. B) required reserves. C) currency in circulation. D) zero; they are the same thing.
Assume that a firm has $100 million in real assets and $90 in real liabilities. If the price level rise by ten percent, the real value of its assets would ________
A) fall B) rise C) change, but more information must be provided to determine their exact movement D) remain unchanged