Controlling the quantity of money and interest rates to influence aggregate economic activity is called

Collusion makes firms better off because if they act as a single entity (a cartel) they can reduce output and increase their prices and profits. But some cartels have failed and others are unstable

Which of the following is a reason why cartels often break down? A) Most cartels do not have a dominant strategy. B) Each member of a cartel has an incentive to "cheat" on the collusive agreement by producing more than its share when everyone else sticks with the collusive agreement. C) Members of a cartel may resent having to share their profits equally. D) When a cartel is profitable the amount of competition it faces increases.

A prominent aspect of the Great Depression of the 1930s, but not of the recent Great Recession, is ________

A) bank panics B) mortgage defaults C) an increase in the credit spread D) nonconventional monetary policy