Why is the prisoner's dilemma game useful in studying oligopoly behavior?
A) Because oligopolies make out like bandits.
B) To illustrate the problems encountered when making decisions under uncertainty.
C) To show that oligopolies behave as monopolists in the long run and earn positive economic profits.
D) To illustrate how barriers to entry lead to economic profits.
Ans: B) To illustrate the problems encountered when making decisions under uncertainty.
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When the nominal interest rate falls, there is
A) a leftward shift of the demand for money curve. B) a downward movement along the demand for money curve. C) no movement along the demand for money curve and the curve does not shift. D) a rightward shift of the demand for money curve. E) an upward movement along the demand for money curve.
To non-activists, which of the following is the most useful stabilization policy?
A) procyclical monetary and fiscal policy changes B) countercyclical monetary changes C) government spending changes D) None of these.