For a Nash equilibrium to be possible, all players must ________
A) be able to predict their outcomes associated with all possible actions of the other players
B) have a way to communicate with the other players
C) have a strategy which allows for collusion
D) Both A and B
A
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If a large open economy, like the United States, reduces its budget deficit, what impact would this have on a small open economy?
A) higher savings B) increased investment C) increased net savings D) no change in interest rates
Suppose that the U.S. can make 15 cars or 20 bottles of wine with one year's worth of labor. France can make 10 cars or 18 bottles of wine with one year's worth of labor. From these numbers, we can conclude
a. the U.S. has a comparative advantage in the production of cars. b. France has a comparative advantage in the production of wine. c. the U.S. has a absolute advantage in the production of wine. d. all of the above are conclusions are correct.
Which of the following variables is capable of continually increasing aggregate demand with no offsetting influence on any of the components of total spending?
A) the inflation rate B) the interest rate C) government spending D) the money supply E) the wage rate
If business taxes are reduced and the real interest rate increases:
A. consumption and saving will necessarily increase. B. the level of investment spending might either increase or decrease. C. the level of investment spending will necessarily increase. D. the level of investment spending will necessarily decrease.