The prisoners' dilemma is a game in which
A) the dominant strategy for all participants is to choose a strategy that makes them all worse off.
B) the dominant strategy is to cooperate.
C) only one of the firms is able to make above-normal profits.
D) each firm, in making decisions on the basis of its own self-interest, also makes decisions that benefit the group as a whole.
A
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The Fisher equation implies that an increase in the nominal rate of interest relative to the real rate indicates that ________
A) inflation is expected to rise B) inflation is expected to decrease C) the real cost of borrowing has increased D) the real cost of borrowing has decreased E) none of the above
In the traditional Keynesian model, if the government cuts taxes, then
A) both consumption and real Gross Domestic Product (GDP) will increase. B) both consumption and real Gross Domestic Product (GDP) will decrease. C) consumption will increase but Gross Domestic Product (GDP) will decrease. D) consumption will decrease but Gross Domestic Product (GDP) will increase.