In game in Scenario 13.8,
A) Y is a dominant strategy for IVY Corp.
B) Z is a dominant strategy for IVY Corp.
C) A is a dominant strategy for SAC Group.
D) B is a dominant strategy for SAC Group.
E) No firm has a dominant strategy.
D
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Suppose you have $200 with which you can buy shares of stock from two companies: ABC Hot Chocolate Company and XYZ Lemonade. Each company's stock currently sells for $100 per share. If the temperature next year is lower than average, the stock price for ABC will increase by $20, and the stock price for XYZ will not change. If the temperature next year is higher than average, the stock price for XYZ will increase by $20, and the stock price for ABC will not change. There is a 50% chance that it will be colder than average next year, and a 25% chance that it will be warmer than average. If you purchase one share of ABC stock and one share of XYZ stock, your expected gain will be ________.
A. $0 B. $40 C. $10 D. $15
In order to increase its target for the federal funds rate, the Fed would normally
A) conduct open market sales. B) conduct open market purchases. C) increase the discount rate. D) increase reserve requirements.
In which of the following situations would a person be best off in real terms?
a. Receiving a 10 percent increase in a nominal wage, with an 8 percent rate of inflation in the economy b. Receiving a 3 percent increase in a nominal wage, with a 0 percent rate of inflation in the economy c. Receiving a 4 percent increase in a nominal wage, with a 5 percent rate of inflation in the economy d. Receiving no increase in a nominal wage, with a 5 percent rate of deflation in the economy e. Receiving a 2 percent decrease in a nominal wage, with a 6 percent rate of deflation in the economy
For an imaginary economy, when the real interest rate is 5 percent, the quantity of loanable funds demanded is $1,000 and the quantity of loanable funds supplied is $1,000 . Currently, the nominal interest rate is 9 percent and the inflation rate is 2 percent. Currently,
a. the market for loanable funds is in equilibrium. b. the quantity of loanable funds supplied exceeds the quantity of loanable funds demanded, and as a result the real interest rate will rise. c. the quantity of loanable funds supplied exceeds the quantity of loanable funds demanded, and as a result the real interest rate will fall. d. the quantity of loanable funds demanded exceeds the quantity of loanable funds supplied, and as a result the real interest rate will rise.