Given the Following: If Shirley Believes Betsy Will Behave in a Self-Interested

question 12

Multiple Choice

Given the following: if Shirley believes Betsy will behave in a self-interested way, Shirley will

• A)predict that Betsy will cooperate, and so Shirley will also cooperate.
• B)predict that Betsy will cooperate, and so Shirley will decide to defect.
• C)predict that Betsy will defect, and so Shirley will also defect.
• D)predict that Betsy will defect, and so Shirley will decide to cooperate.

---

Definitions:

Consumption Spending

Expenditures by households on goods and services, excluding new housing.

Investment Spending

Expenditures on capital goods used to produce goods and services in future periods.

Recessions

Periods of economic decline during which trade and industrial activity are reduced, identified by a fall in GDP in two successive quarters.

Aggregate-Demand Curve

A graphical representation showing the relationship between the overall price level in the economy and the total demand for goods and services.