When players cannot achieve their goals because they are unable to make credible threats or promises, the situation is called a:
A. prisoner's dilemma.
B. failure of dominant strategies.
C. Nash equilibrium.
D. commitment problem.
Answer: D
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Assume that the Fed performs a foreign exchange intervention in which it does nothing except buy German government bonds. One result of this will be that:
A. both the dollar and the euro depreciate. B. the dollar appreciates and the euro depreciates. C. the euro depreciates. D. the dollar depreciates.
In a closed economy, what remains after paying for consumption and government purchases is
a. national disposable income. b. national saving. c. public saving. d. private saving.
Surveys have found that ____________ are the strongest proponents of placing limits on imports.
a. unskilled workers b. farmers c. skilled workers d. college professors
Since 1953 the United States has imposed a quota to limit the imports of peanuts. Figure 9-3 illustrates the impact of the quota. Refer to Figure 9-3. What is the area that represents the deadweight loss as a result of the quota?
A) G + H
B) G + H + I + J
C) E + I + J + M
D) E + M