Refer to the payoff matrix below. Which is the equilibrium of the game using the Pareto criterion?
Camp with Us and Happy Campers compete in the market for campers. Each firm must decide each season if they are going to offer special financing or not. The above payoff matrix shows each firm's net economic profit at each pair of strategies.
A) Camp with Us Offer Financing and Happy Campers Do Not Offer Financing
B) Camp with Us Offer Financing and Happy Campers Offer Financing
C) Camp with Us Do Not Offer Financing and Happy Campers Do Not Offer Financing
D) Camp with Us Do Not Offer Financing and Happy Campers Offer Financing
A) Camp with Us Offer Financing and Happy Campers Do Not Offer Financing
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Starting from long-run equilibrium, a large tax increase will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. recessionary; lower; potential B. expansionary; lower; potential C. expansionary; higher; potential D. recessionary; lower; lower
According to classical economists,
a. money was a "veil" that determined the nominal values in which such variables as the level of economic activity were measured. b. money can have a temporary impact on output. c. it is the nominal interest rates that matters in decisions to save and invest. d. Both a and b e. Both a and c
A beneficial supply shock such as a breakthrough in technology _____
Fill in the blank(s) with the appropriate word(s).
A vertical LM curve means that
A) monetary policy has no impact on the interest rate. B) monetary policy has no impact on income. C) fiscal policy has no impact on the interest rate. D) fiscal policy has no impact on income.