Which of the following pairs help explain why self-correction from a decline in aggregate demand in the economy may be slow rather than rapid?
A. Theory of compensation wage differentials; theory of derived demand for labor.
B. Efficiency wage theory; insider-outsider theory.
C. Insider-outsider theory; principle-agent problem.
D. Externalities; efficiency wage theory.
B. Efficiency wage theory; insider-outsider theory.
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Given an upward-sloping aggregate supply curve, which of the following is most likely to occur if the Fed sells bonds in the open market, ceteris paribus?
A. Greater inflation and more unemployment. B. Greater inflation and less unemployment. C. Lower average prices and less unemployment. D. Lower average prices and more unemployment.
A strategy in which a player cooperates in the current period if the other player cooperated in the previous period, but the player cheats in the current period if the other player cheated in the previous period is called a
A) tit-for-tat strategy. B) trigger strategy. C) duopoly strategy. D) dominant firm strategy.