According to the figure shown:
A. there is no stable equilibrium to the game.
B. both players will act in their own self-interest and get a stable, but less than optimum, equilibrium.
C. both players will act in their own self-interest and get an optimum equilibrium that is stable.
D. both players have an incentive to charge a low price and undercut the competition.
B. both players will act in their own self-interest and get a stable, but less than optimum, equilibrium.
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Inflation is known as a ________ because it ________
A) tax; redistributes goods and services from households and businesses to the government B) revenue; is the only source of business income for the government C) good thing; keeps the value of goods and services increasing D) bad thing; allows people to obtain the wrong kind of wealth E) tax; redistributes goods and services from the government to households and businesses
In a two-period model with production, a shock that shifts the output demand curve to the right, and does not shift the output supply curve
A) causes an increase in the current account surplus and an increase in real output. B) causes no change in the current account surplus and an increase in real output. C) causes a decrease in the current account surplus and no change in real output. D) causes a decrease in the current account surplus and an increase in real output.
Suppose the Chinese central bank wants to keep the exchange rate of its currency value constant over time. An increase in the demand for Chinese goods by American residents will lead the Chinese central bank to
A) coordinate with the U.S. central bank in order to increase the supply of the U.S. dollar in the foreign exchange market. B) increase the demand for the Chinese currency in the foreign exchange market. C) use its dollar reserves to buy the Chinese currency in the foreign exchange market. D) sell the Chinese currency in exchange for U.S. dollars in the foreign exchange market.
A shift in the investment demand curve can be caused by a change in the expectations of profits by businessmen
a. True b. False Indicate whether the statement is true or false