Non-credible threats that are made in a Nash equilibrium (that is not subgame perfect) of a sequential game cannot be made in the first stage by the player who begins the game.
Answer the following statement true (T) or false (F)
True
Rationale: In order to be part of a Nash equilibrium, non-credible threats have to lie "off the equilibrium path". Since one of the actions has to be chosen in the first stage of the game, nothing non-credible can therefore be threatened there -- because the first node of the game is one we reach no matter how the game is played.
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In Figure 4-10 above, if the Fed's goal is to hold income constant, contractionary fiscal policy combined with the Fed's response takes us from points
A) B to D. B) D to B. C) A to C. D) C to A.
When a manufacturer's home currency appreciates substantially,
a. domestic sales decline b. foreign sales decline c. company-owned foreign plant and equipment will increase d. margins often decline e. all of the above
When economists speak of changes in GDP measured in constant dollars, they mean that
What will be an ideal response?
The Federal Reserve System performs many functions but its most important one is:
Controlling the money supply Acting as fiscal agent for the U.S. government Issuing currency Providing for check clearing and collection