The Nash equilibrium of this game is for Happy Feet to ________ and Best Nails to ________.
Happy Feet wants to prevent Best Nails from entering the nail salon market. The above game tree illustrates the different strategies and corresponding payoffs for the two firms. Both Happy Feet and Best Nails have the same strategies of advertising (Ad) or not advertising (No Ad). The payoffs represent net profit in millions.
A) Ad; No Ad
B) No Ad; Ad
C) Ad; Ad
D) No Ad; No Ad
B) No Ad; Ad
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In the figure above, the shift in the supply curve for U.S. dollars from S0 to S1 could occur when
A) the U.S. interest rate rises. B) foreign interest rates rise. C) the expected future exchange rate falls. D) the current exchange rate rises.
A manufacturing firm is deciding whether to invest in a new printer that needs an initial investment of $150,000. This will increase cash flows in the first year by $80,000 and $75,000 in the second year. If the interest rate is 10% then the net present value of these cash flows is
a) $5,000 b) - $9,091 c) -$15,290 d) -$21,901
According to the Ricardian equivalence theorem, budget deficits resulting from tax cuts
A) increase aggregate demand. B) decrease aggregate demand. C) have no effect on aggregate demand. D) affect only aggregate supply.
The official fiscal year budget deficits disappeared from 1998 to 2001
a. True b. False Indicate whether the statement is true or false