Author Question: Effectively managing aggregate demand in order to stabilize nominal GDP requires A) policy makers ... (Read 56 times)

jwb375 · **on:** Jun 29, 2018

Effectively managing aggregate demand in order to stabilize nominal GDP requires

A) policy makers to know the size of the gap between current demand and demand at equilibrium.
B) only that policy makers know what level of aggregate demand is necessary for full employment.
C) successful economic forecasting.
D) that nominal GDP be the same as real GDP.
E) very little information about the economy because the market system is an efficient generator of high-quality information.

Question 2

Refer to the scenario above. Which of the following will happen in equilibrium if the game is played only once?

A) Social surplus will be maximized.
B) Tom will trust Harry and Harry will defect.
C) Tom will trust Harry and Harry will cooperate.
D) Neither of them will make any money.