Management and a labor union are bargaining over how much of a $50 surplus to give to the union. The $50 is divisible up to one cent. The players have one shot to reach an agreement. Management has the ability to announce what it wants first, and then the labor union can accept or reject the offer. Both players get zero if the total amounts asked for exceed $50. Which of the following is NOT a Nash equilibrium?
A. Management requests $25 and the labor union accepts $25.
B. Neither management requesting $50 and the labor union accepting $0 nor management requesting $30 and the labor union accepting $10 are Nash equilibria.
C. Management requests $30 and the labor union accepts $10.
D. Management requests $50 and the labor union accepts $0.
Answer: C
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The Ricardo-Barro effect is based on the idea that ________ when the government has a budget deficit
A) investment demand increases because expected future profits increase B) people decrease their private saving C) investment demand decreases because of the higher real interest rate D) people immediately increase their tax payments E) people increase their private saving
The net present value of $1,000 received in the future would
a. decline if the $1,000 were received sooner. b. increase if the delivery date for the $1,000 were set farther into the future. c. decrease if the interest rate fell. d. decrease if the interest rate rose.
Large increases in the availability of labor would likely be a source of
A. import competing growth. B. generalized growth. C. specialized growth. D. concentrated growth.
As interest rates ________, a firm would have to pay less now to purchase the same number of future dollars.
A. remain unchanged B. rise C. fall D. Interest rates have no bearing on the payment for future dollars.